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2015 (7) TMI 1021 - AT - Income TaxConsideration towards sale of shares received - Addition to income - Held that:- The inference drawn by the tax authorities that the letter was acted upon by the parties and the amount of ₹ 2.00 crores represented the value of 7.5% of the share holding is not supported by any material. On the contrary, a combined reading of MOU and the letter written by Shri V. Prabu Kishore would show that there is a possibility to infer that the amount of ₹ 2.00 crores was a consolidated amount agreed to be paid towards the value of shares as well as for non-compete agreement. The very fact that Shri Janakiram continue to work in the Varun motor groups shows that the MOU was not given effect to and consequently, there is merit in the contentions of the assessee that the letter written by Shri Prabu Kishore was not acted upon. We have earlier noticed that the tax authorities have drawn inferences without bringing any material on record. Under these set of facts, we are of the view that the Learned CIT(A) was not justified in treating the amount of ₹ 2.00 crores as the sale consideration towards the shares transferred by the assessees. Since we have held that the surrounding circumstances show that the MOU / letter was not given effect to and the amount of ₹ 2.00 crores does not represent the sale value of shares alone, we do not find it necessary to deal with the question of actual receipt/payment or accrual. We are unable to agree with the conclusions reached by Learned CIT(A). Accordingly, we set aside the orders passed by Learned CIT(A) in the hands of both the assessees herein and direct the Assessing Officer to delete the impugned addition contested by both the assessees. - Decided in favour of assessee.
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