Sri. Srinivasan Chandira Kumar, Bangalore V. Addl.C.I.T., Bangalore

ITA 1061/BANG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80772 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 22-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Capital asset; Share purchase agreement; Additional evidence
• Section: 37(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1061/BANG/2012 ASSESSMENT YEAR : 2009-10 SHRI SRINIVASAN CHANDIRA KUMAR, NO.596, 10 TH CROSS, 7 TH BLOCK, JAYANAGAR, BANGALORE 560 082. PAN: AAIPC 4461B VS. THE ADDITIONAL CIT, RANGE 4, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI H. GURUSWAMY, ITP RESPONDENT BY : SHRI BIJOY KUMAR PANDA, ADDL. CIT (DR) DATE OF HEARING : 24.11.2014 DATE OF PRONOUNCEMENT : 28.11.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL IS AGAINST THE ORDER DATED 14.5.2012 OF THE CIT(APPEALS)-II, BANGALORE RELATING TO ASSESSMENT Y EAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL. HE HELD 1,35,000 EQUITY SHARES IN A COMPANY BY NAME TRIDENT POWER CRAFT PVT. LTD. [ TRIDENT] . ALL THE ITA NO. 1061/BANG/2012 PAGE 2 OF 12 SHAREHOLDERS OF TRIDENT INCLUDING THE ASSESSEE SOLD THEIR SHARES TO A COMPANY BY NAME EMR MAURITIUS LTD. [EMR] FOR A CONSIDERATION OF RS.600 CRORES. THE CONSIDERATION RECEIVED BY THE A SSESSEE ON SALE OF HIS SHARES IN TRIDENT WAS A SUM OF RS.27 CRORES. THE A SSESSEE IN HIS RETURN OF INCOME FILED FOR A.Y. 2009-10 DECLARED A LONG TERM CAPITAL GAIN ON SALE OF SHARES OF RS.26,07,28,826. THE SALE OF SHARES OF T RIDENT BY ALL THE SHAREHOLDERS TO EMR WAS MADE PURSUANT TO AN AGREEME NT DATED 12.2.2009 [HEREINAFTER REFERRED TO AS THE SHARE PU RCHASE AGREEMENT] BETWEEN EMR AND FOUR INDIVIDUALS (INCL UDING THE ASSESSEE) TO HOLD THE ENTIRE SHARE OF TRIDENT. 3. WHILE COMPUTING LONG TERM CAPITAL GAINS, ASSESSE E CLAIMED AS A DEDUCTION A SUM OF RS.20,97,600. THE ASSESSEE SUBM ITTED BEFORE THE AO THAT AS PER CLAUSE 29 OF THE SHARE PURCHASE AGREEME NT, THE ASSESSEE AND THE THREE OTHER SHAREHOLDERS HAD TO CONTRIBUTE A SU M OF RS.3.45 CRS. FOR THE BENEFIT OF EMPLOYEES OF TRIDENT. THE ASSESSEE AS HIS SHARE OF THE AFORESAID SUM OF RS.3.45 CRORES HAD TO CONTRIBUTE A SUM OF RS.20,97,600. CLAUSE 29 OF THE SAID AGREEMENT READS AS UNDER:- 29. PAYMENT TO EMPLOYEES WITHIN 60 DAYS FOLLOWING THE CLOSING DATE, THE SEL LERS, AS A CONDITION TO THIS AGREEMENT, CONVENANT AND AGREE TH AT THEY SHALL PAY A SUM OF RS.3,45,00,000/- (THIRTY FOUR MILLION FIVE HUNDRED THOUSAND) TO A TRUST SET UP BY THE SELLERS FOR THE BENEFIT OF THE EMPLOYEES (INCLUDING SELECTIVE EX-EMPLOYEES) OF THE COMPANY. ITA NO. 1061/BANG/2012 PAGE 3 OF 12 4. ACCORDING TO THE ASSESSEE, THE AFORESAID SUM WAS AN EXPENDITURE INCURRED BY THE ASSESSEE WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER AS CONTEMPLATED U/S. 48(I) OF THE ACT. THE ASSESSE E EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE AFORESAID SUM WAS CONTRI BUTED TO MEET ANY CONTINGENCY LIABILITY ARISING OUT OF POSSIBLE OBJEC TION FROM THE EMPLOYEES ON SALE OF BUSINESS OF TRIDENT TO EMR. THE AO, HOWEVE R, DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION OBSERVING AS FOLLOWS: - AS CAN BE SEEN, THE CONDITION IN THE AGREEMENT SP ECIFIES THAT THE (I) AMOUNT IS TO BE PAID TO A TRUST, (II) THE TRUST IS TO BE SET UP BY THE SELLERS (4 PERSONS INCLUDING THE ASSE SSEE) WITHIN 60 DAYS FROM THE DATE OF AGREEMENT. HOWEVER, IT IS FOUND THAT NO TRUST HAS BEEN SET UP BY THE SELLERS. THE AMOUNT HAS BEEN DEPOSITED ONLY TO A S EPARATE BANK ACCOUNT. AS THE CONDITION OF THE AGREEMENT IS NOT FULFILLED, THE PURPOSE AND UTILIZATION OF THIS CONTRIBUTION REMAIN S DOUBTFUL. THEREFORE, THIS CONTRIBUTION CANNOT BE ALLOWED AS E XPENDITURE IN THE HANDS OF THE ASSESSEE AND WILL BE ADDED BACK TO THE INCOME FRO THE YEAR. 5. ON APPEAL BY THE ASSESSEE, THE LD. CIT(APPEALS) FORMULATED THE FOLLOWING TWO ISSUES FOR CONSIDERATION ON THE CLAIM MADE BY THE ASSESSEE FOR DEDUCTION:- (I) WHETHER THE PAYMENT IS ACTUALLY MADE AS PER THE AGREEMENT? (II) WHETHER ANY SUCH PAYMENT AS PER THE AGREEMENT QUALIFIES FOR DEDUCTION U/S 48 AS CLAIMED? ITA NO. 1061/BANG/2012 PAGE 4 OF 12 6. ON THE FIRST ISSUE, THE ASSESSEE SUBMITTED BEFOR E THE CIT(A) THAT THOUGH AS PER CLAUSE 29 OF THE SHARE PURCHASE AGREE MENT, A TRUST HAD TO BE SET UP BY THE SELLERS OF THE SHARES FOR THE BENE FIT OF EMPLOYEES OF TRIDENT, THE SAME WAS FELT UNNECESSARY LATER. IN T HIS REGARD, IT WAS POINTED OUT THAT FORMATION OF THE TRUST AND CONTRIBUTION BY THE SELLERS TO THE SAID TRUST PROPOSED FOR THE BENEFIT OF EMPLOYEES WAS ONL Y WITH A VIEW TO DISPEL ANY FEARS OF THE EMPLOYEES OF RETRENCHMENT FROM EMP LOYMENT, WHICH MIGHT FORCE THE EMPLOYEES TO TAKE RECOURSE TO PROCEEDINGS FOR STALLING THE SALE OF SHARES TO EMR. ACCORDING TO ASSESSEE, THE EMPLOYEE S WERE LATER CONVINCED THAT THERE WOULD BE NO RETRENCHMENT AND T HEREFORE FORMATION OF THE TRUST WAS ABANDONED. THE ASSESSEE, HOWEVER, OP ENED A BANK ACCOUNT IN THE NAME OF TRIDENT EX-PROMOTERS WELFARE FUND. THE FUND WAS MEANT FOR THE WELFARE OF EMPLOYEES OF TRIDENT. THE ASSES SEE POINTED OUT THAT THE ASSESSEE CONTRIBUTED HIS SHARE OF RS.20,97,600 AND THE REMAINING SHAREHOLDERS CONTRIBUTED THE REMAINING AMOUNT SO AS TO MAKE THE CONTRIBUTION IN THE SAID BANK ACCOUNT TO THE EXTENT OF RS.3.45 CRORES AS ENVISAGED UNDER CLAUSE 29 OF THE SHARE PURCHASE AGR EEMENT. THE ASSESSEE ALSO FILED AN UNDATED CERTIFICATE DECLARIN G THAT THE CONDITION MENTIONED IN CLAUSE 29 OF THE SHARE PURCHASE AGREEM ENT WAS WAIVED. THIS CERTIFICATE WAS SIGNED BY VICE PRESIDENT OF TR IDENT. WITH REGARD TO THE ACTUAL CONTRIBUTION BY THE ASSESSEE FOR THE BENEFIT OF EMPLOYEES, IT WAS POINTED OUT BEFORE THE CIT(A) THAT MONIES HAVE COME INTO THE BANK ACCOUNT ITA NO. 1061/BANG/2012 PAGE 5 OF 12 OPENED FOR THIS PURPOSE AND PAYMENTS FROM AND OUT O F THE SAID ACCOUNT HAVE BEEN MADE TO SEVERAL EMPLOYEES OF TRIDENT. 7. THE CIT(A) ON CONSIDERATION OF THE ABOVE SUBMISS IONS WAS NOT INCLINED TO ACCEPT THE PLEA OF THE ASSESSEE. HE HEL D THAT THERE WAS NO CLAIM WHATSOEVER BY THE EMPLOYEES WHICH NECESSITATED CONT RIBUTION BY THE ASSESSEE TO A TRUST FOR WELFARE OF THE EMPLOYEES. THE CIT(A) RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN CIT V. R. RANGA SHETTY, 151 ITR 79 , WHEREIN IT WAS HELD THAT COMPENSATION PAID TO A TENANT ON TRANSFER BY COMPULSORY ACQUISITION OF PRO PERTY IS NOT EXPENDITURE INCURRED IN CONNECTION WITH TRANSFER AND NOT ALLOWA BLE AS A DEDUCTION. FOLLOWING THE SAID DECISION, HE HELD THAT EXPENDITU RE IN QUESTION CLAIMED BY THE ASSESSEE WAS A VOLUNTARY PAYMENT AND THEREFORE CANNOT BE ALLOWED AS DEDUCTION U/S. 48(I) OF THE ACT. 8. WITH REGARD TO QUESTION OF ACTUAL PAYMENT OF MON EY FOR THE PURPOSE STATED BY THE ASSESSEE, THE CIT(A) FOUND THAT THE A CTUAL UTILIZATION OF THE MONEY DEPOSITED IN THE BANK ACCOUNT BY THE ASSESSEE COULD NOT BE VERIFIED. IN THIS REGARD, HE REFERRED TO THE REMAN D REPORT FILED BY THE AO IN WHICH THE AO HAD POINTED OUT THAT TOTAL AMOUNT GIVE N IN THE LIST AND THE TOTAL AMOUNT MENTIONED IN THE AGREEMENT DID NOT TAL LY AND THAT THE DATE OF PAYMENTS WERE NOT GIVEN. SOME PAYMENTS HAD BEEN MA DE BY CASH WHICH WERE NOT VERIFIABLE. BASED ON THE REMAND REPORT OF THE AO FILED BEFORE THE CIT(A), THE LD. CIT(A) CONCLUDED AS FOLLOWS:- ITA NO. 1061/BANG/2012 PAGE 6 OF 12 IT IS CLEAR THAT, ONLY DURING THE APPELLATE PROCEE DINGS, THE APPELLANT HAS STATED THAT THE CONDITION TO FORM THE TRUST WAS WAIVED OFF BY THE COMPANY. THESE CONTENTIONS SHOW THAT PAYMENT TO EMPLOYEES WELFARE HAS NOT BEEN PROVED. MORE SO, THE AMOUNT CANNOT BE TERMED AS EXPENDITURE AS BEING WHOLLY AND EXCLUSIVELY FOR TRANSFER FOR IT TO BE ALLOWED AS DE DUCTION U/S. 48(I) AS HELD ABOVE. THEREFORE, DISALLOWANCE MADE BY THE AO IS IN ORDER AND IS UPHELD. THE APPELLANT DOES NOT SUCCEE D IN THESE GROUNDS OF APPEAL ALSO. 9. AGGRIEVED BY THE AFORESAID ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THIS APPEAL WAS ORIGINALLY HEARD BY THE TRIBUNAL AND AN ORDER DATED 20.9.2013 WAS PASSED. IN THE APPEAL BEFORE THE TRIBUNAL, THE ASSESSEE SOU GHT TO MAKE A CLAIM FOR DEDUCTION OF THE SUM OF RS.20,97,600 U/S. 37(1) OF THE ACT, THE SAME WAS NOT ALLOWED BY THE TRIBUNAL. THE ASSESSEE FILED AP PEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT OF KARNA TAKA IN ITA NO.134/2014. THE HONBLE HIGH COURT BY ITS JUDGMEN T DATED 4.4.2014 SET ASIDE THE ORDER OF TRIBUNAL AND REMANDED THE APPEAL TO THE TRIBUNAL FOR FRESH CONSIDERATION, OBSERVING AS FOLLOWS:- I. THE ORDER DATED 20.9.2013 IS SET ASIDE AND THE ITA NO.1061/BANG/2012 IS RESTORED TO FILE. THE TRIBUNA L SHALL CONSIDER THE APPEAL AFRESH ON MERITS IN ACCORDANCE WITH LAW. II. IT IS MADE CLEAR THAT IT WOULD NOT BE OPEN TO T HE APPELLANT- ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 37 OF THE ACT BEFORE THE TRIBUNAL. IN OTHER WORDS, THE TRIBUNAL SHALL EXAMI NE THE APPEAL AFRESH IN THE LIGHT OF THE CLAIM OF THE APPELLANT T HAT HE IS ENTITLED FOR DEDUCTION UNDER THE PROVISIONS OF SECTION 48 OF THE ACT. ITA NO. 1061/BANG/2012 PAGE 7 OF 12 10. THE LD. COUNSEL FOR THE ASSESSEE FILED BEFORE U S AN APPLICATION FOR ADMITTING A LIST OF 482 EMPLOYEES TO WHOM ASSESSEE HAS MADE VARIOUS PAYMENTS TOTALLING TO RS.2,06,89,898. THE ASSESSEE HAS ALSO FILED ANOTHER LIST OF 155 EMPLOYEES TO WHOM PAYMENT TO THE EXTENT OF RS.48,44,585 HAD BEEN MADE. THESE 155 PERSONS ARE EMPLOYEES OF M/S. MARUTHI ELECTRICAL WORKS WHICH IS A PROPRIETARY BUSINESS OF AN INDIVID UAL. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THESE 155 EMP LOYEES WERE EMPLOYEES WORKING FOR TRIDENT ON DEPUTATION FROM M/S. MARUTHI ELECTRICAL WORKS AND THEREFORE THEY WERE ALSO TO BE PAID THE EMPLOYEES W ELFARE FUND. THE CERTIFICATE FROM STATE BANK OF INDIA, IN WHICH THE ACCOUNT TRIDENT EX- PROMOTERS WELFARE FUND WAS OPENED AND FACT THAT A S UM OF RS.3,45,00,000 WAS DEPOSITED IN THAT ACCOUNT WAS AL SO FILED IN WHICH THE BANK HAS CERTIFIED THAT THEY HAD MADE PAYMENT OF RS .2,06,89,898 TO THE SB ACCOUNTS OF 482 EMPLOYEES AS PER LIST FILED BY T HE ASSESSEE BEFORE US. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE AFORESAID DOCUMENTS WILL SHOW THAT THE ASSESSEE HAS ACTUALLY MADE PAYMENT OF THE SUM IN QUESTION AND THEREFORE THE ASSESSEE HAS INCURRED THE EXPENDI TURE AND DEDUCTION U/S. 48(I) HAD TO BE ALLOWED. THE LD. COUNSEL FOR T HE ASSESSEE THEREFORE PRAYED THAT THE AFORESAID ADDITIONAL EVIDENCE BE AD MITTED FOR CONSIDERATION. 11. THE LD. COUNSEL FOR THE ASSESSEE FURTHER FILED A CONFIRMATION FROM MARUTHI ELECTRICAL WORKS IN WHICH IT HAS BEEN CONFI RMED THAT 155 EMPLOYEES WERE ON DEPUTATION FROM THEM TO TRIDENT A ND WERE THEREFORE TO BE REGARDED AS OUTSOURCED EMPLOYEES OF TRIDENT AND THEREFORE THEY WERE ITA NO. 1061/BANG/2012 PAGE 8 OF 12 ALSO ENTITLED TO RECEIVE THE BENEFITS GIVEN TO EMPL OYEES OF TRIDENT. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A) AND IT WAS ALSO SUBMITTED BY HIM THAT THE EX PENDITURE IN QUESTION HAD TO BE INCURRED AS IT WAS A CONDITION FOR SALE O F SHARES OF THE ASSESSEE TO EMR. ACCORDING TO HIM, THE CONDITIONS LAID DOWN U/S. 48(I) OF THE ACT ARE SATISFIED AND THEREFORE ASSESSEE IS ENTITLED TO CLA IM THE AFORESAID SUM AS A DEDUCTION WHILE COMPUTING LONG TERM CAPITAL GAINS. 12. THE LD. DR, APART FROM RELYING ON THE ORDERS OF CIT(A), FURTHER SUBMITTED THAT THE PAYMENT IN QUESTION IS PURELY A VOLUNTARY PAYMENT AND CANNOT BE BROUGHT WITHIN THE AMBIT OF SECTION 48(I) OF THE ACT. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (1) CIT V. ATTILI N. RAO, 119 TAXMAN 1030 (SC) (2) CIT V. R. RANGA SHETTY, (1985) 22 TAXMAN 192 (K AR) (3) CIT V. RADIO TALKIES, 238 ITR 872 (BOM) (4) L.M. PATEL & B.M. PATEL (HUF) V. CIT, (2012) 2 7 TAXMAN.COM 234 (GUJ) (5) KRISHNADAS G. PARIKH V. DCIT (ASST.), SR-2, IT A NO.2090/AHD/2000. (6) ITO V. NARENDRA S. KAPADIA, ITA NO.5767/BOM/198 9. 13. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. U/S. 48(I) OF THE ACT, COMPUTATION OF CAPITAL GAINS HAS TO BE MADE BY REDUCING FROM THE FULL VALUE OF CONSIDERATION OR ACCRUING AS A RESULT OF TRANSFER OF THE ITA NO. 1061/BANG/2012 PAGE 9 OF 12 CAPITAL ASSET, EXPENDITURE WHOLLY AND EXCLUSIVELY I N CONNECTION WITH SUCH TRANSFER. WE HAVE ALREADY SEEN THAT CLAUSE 29 OF T HE SHARE PURCHASE AGREEMENT PROVIDES THAT AS A CONDITION OF THE SHARE PURCHASE AGREEMENT, THE SELLER HAS TO PAY A SUM OF RS.3.45 CRORES TO A TRUST SET UP BY THE SELLER FOR THE BENEFIT OF THE EMPLOYEES OF THE COMPANY (TR IDENT). ADMITTEDLY, NO TRUST FOR THE BENEFIT OF EMPLOYEES HAD BEEN CRATED. IT IS THE PLEA OF THE ASSESSEE THAT CLAUSE 29 OF THE SHARE PURCHASE AGREE MENT WAS WAIVED BY THE PARTIES TO THE SHARE PURCHASE AGREEMENT AND INS TEAD A BANK ACCOUNT IN THE NAME OF M/S. TRIDENT EX-PROMOTERS WELFARE FU ND WAS OPENED IN WHICH A SUM OF RS. 3.45 CRORES WAS DEPOSITED AND UL TIMATELY UTILISED FOR MAKING PAYMENTS TO THE EMPLOYEES OF TRIDENT (INCLUD ING EX-EMPLOYEES). THE WAIVER OF THE CONDITION IN CLAUSE 29 OF THE SHA RE PURCHASE AGREEMENT HAS NOT BEEN SUBSTANTIATED BY THE ASSESSEE. IN THI S REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAD PLACED RELIANCE ON A CERTIFICA TE GIVEN BY THE VICE PRESIDENT OF TRIDENT. AS WE HAVE ALREADY SEEN, EMR WAS THE PURCHASER AND 4 INDIVIDUALS OWNING THE ENTIRE SHARE CAPITAL O F TRIDENT WERE THE SELLERS. THEREFORE, THE CERTIFICATE OF WAIVER OF CLAUSE 29 O F THE SHARE PURCHASE AGREEMENT GIVEN BY VICE PRESIDENT OF TRIDENT HAS BE EN RIGHTLY HELD BY THE CIT(APPEALS) TO BE NOT A VALID BASIS ON WHICH THE A SSESSEE CAN CLAIM MODIFICATION OF CLAUSE 29 OF THE SHARE PURCHASE AGR EEMENT. WE ARE, HOWEVER, OF THE VIEW THAT HAD CLAUSE 29 OF THE SHAR E PURCHASE AGREEMENT BEEN PROPERLY COMPLIED WITH BY THE ASSESSEE, THEN T HE CLAIM OF THE ASSESSEE COULD HAVE BEEN ENTERTAINED. SINCE THE CO NTRIBUTION BY THE ITA NO. 1061/BANG/2012 PAGE 10 OF 12 ASSESSEE IS NOT IN ACCORDANCE WITH CLAUSE 29 OF THE SHARE PURCHASE AGREEMENT, THE ASSESSEE CANNOT CLAIM DEDUCTION OF T HE SUM IN QUESTION AS AN EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN C ONNECTION WITH THE TRANSFER. WE MAY ALSO MENTION THAT DETAILS OF PAYM ENT FILED BY THE ASSESSEE BEFORE US WILL NOT BE OF ANY ASSISTANCE BE CAUSE THE PAYMENTS NOW CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE TO TH E EMPLOYEES OF TRIDENT, CANNOT BE TRACED TO CLAUSE 29 OF THE SHARE PURCHASE AGREEMENT. THEREFORE, THE SAID PAYMENT, EVEN IF IT IS TRUE, CA NNOT BE SAID TO BE AN EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH THE TRANSFER OF SHARES. WE, THEREFORE, DO NOT DEEM IT NECESSARY TO CONSIDER THE ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY THE ASSES SEE BEFORE US. 14. WE MAY ALSO ADD THAT HAD THE ASSESSEE ESTABLISH ED SUBSTITUTION OF THE CONDITIONS MENTIONED IN CLAUSE 29 OF THE SHARE PURCHASE AGREEMENT WITH THE MANNER IN WHICH ASSESSEE DISCHARGED PAYMEN TS TO THE EMPLOYEES, THEN THE ADDITIONAL EVIDENCE WITH REGARD TO PAYMENTS COULD HAVE BEEN EXAMINED. SINCE THE ASSESSEE HAS FAILED TO DO SO, CLAIM OF THE ASSESSEE FOR HAVING MADE PAYMENTS TO EMPLOYEES CAN AT BEST BE REGARDED AS A VOLUNTARY PAYMENT, WHICH CANNOT BE SAID TO BE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANS FER OF SHARES. 15. WE MAY ALSO ADD THAT THE QUESTION WHETHER THE E XPENDITURE IS INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER, WHICH IS ESSENTIALLY A QUESTION OF FACT, DEPENDENT ON FACTS OF EACH CASE. THE ITA NO. 1061/BANG/2012 PAGE 11 OF 12 JUDICIAL PRECEDENTS CITED BY THE LD. DR BEFORE US, CAN ONLY SERVE AS A GUIDANCE. FOR EXAMPLE IN CIT V. RADIO TALKIES, 238 ITR 872 (BOM) , THERE WAS A SALE OF BUSINESS OF EXHIBITING FILMS AN D PROPERTY CONSISTING OF LAND AND BUILDINGS. THE AGREEMENT PROVIDED THAT SE LLER HAD TO DISCHARGE THE LIABILITIES OF EMPLOYEES GRATUITY, RETRENCHMEN T COMPENSATION, BONUS, ETC. PAYMENT WAS TO THE FORMER EMPLOYEES AND NOT T O THE EMPLOYEES WHO CONTINUE AFTER TAKE OVER OF THE BUSINESS BY THE PUR CHASER. IN THOSE CIRCUMSTANCES, THE HONBLE BOMBAY HIGH COURT HELD T HAT EXPENDITURE WAS NOT ALLOWABLE U/S. 48(I) OF THE ACT. IN THE PRESEN T CASE, HOWEVER, WE ARE CONCERNED WITH A CASE OF CHANGE OF OWNERSHIP OF BUS INESS, CONSEQUENT TO SALE OF SHARES. THE ENTITY, TRIDENT, CONTINUES TO REMAIN IN EXISTENCE. THEREFORE, THE AFORESAID DECISION CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. WE HAVE THEREFORE NOT DISCUSSED THE C ASE LAWS CITED BY THE LEARNED DR BEFORE US. 16. FOR THE REASONS GIVEN ABOVE, WE UPHOLD THE ORDE R OF THE LD. CIT(APPEALS) AND DISMISS THE APPEAL BY THE ASSESSEE . 17. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF NOVEMBER , 2014 . SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 28 TH NOVEMBER, 2014 . /D S/ ITA NO. 1061/BANG/2012 PAGE 12 OF 12 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.