Consideration bifurcated for negative covenants in share purchase agreement is not chargeable to tax

Brief of the Case Punjab & Haryana High Court held In the case of CIT vs. Smt. Usha Saboo that although the agreement did not bifurcate the consideration towards the various covenants in the agreement, the assessee was entitled to bifurcate the same and apportion a part thereof towards the negative covenants. The matter in our view is covered in the respondents’ favour by the judgment of the Supreme Court in the case of Commissioner of Income Tax, Madras v. Best and Co. (Private) Ltd. 1966 Income Tax Reports (60) 11. This is also the view taken by several other High Courts. On facts we h...