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2023 (8) TMI 819 - AT - Income TaxLTCG on sale of listed share - increase in sale consideration of Shares - HELD THAT:- The share price of M/s Axis IT&T Limited was Rs. 11.21/- per share on the date of signing the term sheet on 30.11.2007 showing share price from the website moneycontrol.com. Payments were made as per agreement to sell and the same is verifiable from the bank statements. It is crystal clear that the transaction was an off market transaction of listed shares held by the assessee as an investment in its balance sheet and assessee has entered into a share purchase agreement on 11.01.2008 and the transfer of shares actually took place on 28.4.2008 and consideration of the shares was taken Rs. 13.50 per share i.e. the price prevailing on the date of share purchase agreement. As per clause B of the aforesaid agreement the sellers are inter alia the owners of 12,113,184 fully paid up equity shares, representing 60.69% of the issued, subscribed and paid up equity shares capital of the company as more fully specified in Annexure-A. They have an absolute right to sell the shares, free from all liens, charges and encumbrances. Therefore, it is established that the adoption of value by the AO as on the date of transfer was only a hypothetical value i.e. the price as on 28.4.2008. Hence, the resulting addition is not tenable. It is settled law that full value of consideration used in section 48 does not have any reference to market value but only to consideration referred to in sale deeds as sale price of assets which have been transferred, as laid down in the case of CIT vs. Gillanders Arbuthnot & Co. (1972 (9) TMI 13 - SUPREME COURT) It is settled law that an agreement always has to be taken to be correct if the assessee has acted in bonafide manner, unless AO has brought evidence on record that it is fraudulent. In this case the Revenue has not been able to establish malafide on the part of the assessee. We note that decision of SA Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] wherein, it has been held that AO cannot step in the shoes of the businessman and decide as to how affairs of business were to be run and wasteful or excessive expenditure was to be curtailed is very much applicable in the case of the assessee, as the lower authorities have ignored the principle as laid down above. Lower authorities have been completely wrong in making and sustaining the addition on account of increase in sale consideration of shares, which needs to be deleted. Decided in favour of assessee.
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