TMI Blog2019 (5) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... hing but part of the sale price of the share. The revised offer which the company announced for issuance of the shares quoted the price of the share at ₹ 2,100/. This included the additional component of ₹ 16/per share. Looked from any angle thus, the shares were sold @ ₹ 2,100/per share. The component of ₹ 16/per share was embedded in the share price. This component cannot be seen as an interest on delayed payment on price of the share. This amount of ₹ 16/, thus, was part of the sale price of the share and would retain the same character as the original price of the share. The receipt of ₹ 2.20 Crores relatable to this component of ₹ 16/per share was thus clearly a capital receipt. In case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share holders of Iflex at the price of ₹ 1,475/per share, that the open offer indicated that additional offer of ₹ 11.35 per share was to be payable to the share holders, that as per the letter of open offer the additional consideration per share was to be paid due to delay in making the open offer and dispatch the letter of the offer based on the time line prescribed by SEBI, that later on the consideration of open offer was revised to ₹ 2,084/per share, that the additional consideration for delay was revised to ₹ 16/per share, that the open offer letter and public announcement indicated that a revised offer of ₹ 2,100/per share (including additional consideration of ₹ 16/) was to be payable for the shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnouncement indicated that a revised offer of ₹ 2,100/per share (including additional consideration of ₹ 16/) was to be payable for the shares tendered by the share holders under the open offer, that in response to the open offer the assessee tendered its holding of 13,97,879 shares of Iflex, that it received ₹ 2,89,77,45,900/that the said sum included additional consideration of ₹ 2.20 crores. In our opinion, the basic issue to be decided is to determine as to whether the amount of ₹ 2.20 crores rendered by the assessee as additional consideration is taxable or not ? While going through the page Nos.117 and 119 of the Paper Book, we find that the offer letter contains two sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had no control over the decision making process of Oracle. If we see the transaction from the debtor/creditor angle it is clear that there was no such relationship between the assessee and Oracle. The assessee owned shares of Iflex and in response to the open letter by Oracle it decided to sell the sharesit was a pure and simple case of selling of shares. The assessee had not entered into any negotiations with Oracle and transferred the shares as per a scheme that was approved by SEBI. The assessee had not advanced any sum to Oracle and had not received any interest from it for delayed repayment of principal amount. In short, the additional consideration received by the assessee from Oracle was not penal interest and was part of the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed facts are that the sum of ₹ 16/per share which resulted into additional receipt of ₹ 2.20 Crores to the Assessee, was part of the offer for sale of shares made by the Assessee. The reason for increasing the offer by the said sum of ₹ 16 per share may be on account of delay in issuance of the shares, nevertheless, the same was nothing but part of the sale price of the share. The revised offer which the company announced for issuance of the shares quoted the price of the share at ₹ 2,100/. This included the additional component of ₹ 16/per share. Looked from any angle thus, the shares were sold @ ₹ 2,100/per share. The component of ₹ 16/per share was embedded in the share price. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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