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TMI Blog2020 (7) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of sale was ₹ 71/- per share and therefore, the excess price of ₹ 10/- per share received by the respondent/assessee was treated as non-compete fee by the AO and the Agreement also stipulates that no non-compete fee would be paid by the purchaser and on account of the fact that the assessee selling a large amount of 2,82,50,291 equity shares to M/s.Tube Investments of India to get control over the company and that apart, same amount has been paid to third party general public also. As brought to the knowledge of this Court by the learned counsel for the respondent/assessee that the rate of ₹ 81/- per share was offered to all shareholders vide Regulations 3[1] and 4 of the Securities and Exchange Board of India [Subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that amount given for take over of business including Non-Compete covenant contained in the Sale Purchase Agreement was only share purchase agreement and not business take over, where the valuation is pursuant to Regulations 3[1] and 4 of the Securities and Exchange Board of India [Substantial Acquisition of Shares and Take overs] Regulations 2011, which deal with valuation of shares resulting in transfer of business? 3. Whether the Appellate Tribunal is correct in holding that the amount received by the Public and the Managing Director is to be equally treated by ignoring the fact that the Managing Director is controlling the business and has given up the business continuity and portion of his share has been retained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance of ₹ 21/- per share as business income and a clarificatory Circular of the Central Board of Direct Taxes bearing No.6/2016 dated 29.02.2016 would also come to the aid of the respondent/assessee and therefore, found that the amount received by the assessee towards sale of 2,82,50,291 shares which was held as investment to M/s.Tube Investments of India vide Agreement dated 13.07.2012 will have to be treated as Capital Gains and not as business income and as a result of the said finding, it also answered the question ''whether there is a non-compete fee embedded in the transfer?'' and found that the promoter as well as the public shareholders have paid the same price, i.e, ₹ 81/- per share and the amount pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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