TMI Blog2022 (8) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the consideration received. The expenditure incurred and cost of acquisition are deductible. The Revenue's case is, payment of tax does not fall in these two categories. But in the facts of this case, the total amount realised or in other words, which the appellant got in her hand, is Rs.1.80 Crores. The deduction is claimed based on the agreement between the parties. A careful perusal of the agreement shows that intention of the parties is clear to the effect that the value of the shares shall be the amount agreed between the parties excluding the tax component. However, the contention urged by Shri Aravind that tax component should be distributed among both sellers merits consideration. Therefore, appellant shall be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebruary 28, 2008 to sell her shares in the following four companies. i. M/s Bobba Aviation Ground Services (P) Ltd. ii. M/s Bobba Aviation Ground Handling Services (P) Ltd. iii. M/s Ground and Air Technical Services (P) Ltd. and iv. M/s Mount Kailash Power Projects (P) Ltd. 3. We are concerned with the sale of appellant's shares in the said companies in favour of M/s Soham Renewable Energy India Private Limited. 4. Shri Shankar, submitted that the consideration agreed between the parties for sale of appellant's shares was Rs.2,70,32,278/- minus the tax component of Rs.90,74,103/-. The appellant had agreed to pay the tax component as per Clause 7(1) of the share purchase agreement. She claimed deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res and tax component does not fall within the definition of expenditure. 8. We have carefully considered rival submissions and perused the records. 9. Undisputed facts of the case are, appellant has agreed to sell her shares at Rs.2.70 Crores. Clause 7.1 of the agreement extracted in the ITAT order reads as follows: 7.1 The Sellers shall be liable to reimburse the Companies for all taxes that may be levied on the Companies (consisting of both the Aviation Business and the power business) in respect of the period up to the Closing Date and in the event of the Companies receiving any refund of any taxes in respect of the period up to the Closing date, the same shall be forthwith passed on to the Sellers, failing which, the Sellers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.03.08 GATS 2005-06 10,00,000 4 31.03.08 GATS 2005-06 5,00,000 5 02.05.08 GATS 2005-06 9,49,185 6 27.09.08 GATS 2008-09 44,90,034 Total 90,74,103 14. Thus, in effect, the net amount that the appellant has realised is Rs.1,79,58,175/- (Rs.2,70,32,278/- minus Rs.90,74,103/-) by selling her shares. 15. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted by deducting full value of the consideration received. The expenditure incurred and cost of acquisition are deductible. The Revenue's case is, payment of tax does not fall in these two categories. But in the facts of this case, the total amount realised or in other words, which the appellant got in her hand, is Rs.1.80 Crores. The deduction is claimed based on the agreement between the parties. A careful perusal of the agreement shows that intention of the parties is clear to the effect that the value of the shares shall be the amount agreed between the parties excluding the tax component. However, the contention urged by Shri Aravind that tax component should be distributed among both sellers merits consideration. Therefore, appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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