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2016 (10) TMI 802 - AT - Income TaxComputation of capital gains - Expenditure incurred in connection with transfer - deduction of payment of taxes as per the agreement - expenditure incurred wholly and exclusively in connection with transfer of such shares u/s 48 - Held that:- assessee and others are liable to reimburse company for all the taxes that may be levied on the company in respect of period up to the closing date and in the event of company receiving any refund of any tax in respect of period up to the closing date, the same shall be passed on to the seller by the companies. Thus, it is a future contingent liability as only future tax that may be levied up to the date of closing date is liable to be reimbursed to companies. Furthermore, there is no stipulation in the agreement that the assessee should alone discharge the tax liabilities of the companies. Further, the entire tax liability of the companies cannot be fastened on a single shareholder. If at all the tax liability of private limited company is to be borne by shareholders, it has to be borne equally in the ratio of shares held. Therefore the claim is not only untenable but also appears to be a device invented to reduce tax liability in the hands of assessee. Decided against the assessee.
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