JUDGMENT judgment of court was delivered by S. J. Vazifdar, Actg. C. J.-These appeals are against order of Income-tax Appellate Tribunal allowing respondent's appeals against order of Commissioner of Income-tax (Appeals) in proceedings arising out of assessment order passed under section 143(3) of Income-tax Act, 1961, in respect of assessment year 1994-95. main questions of law are same in all appeals. questions of fact arise on account of same transaction. relevant facts are almost identical and are in any event interconnected. We, therefore, dispose of these appeals by this common order and judgment. We will for convenience, however, refer to facts in I. T. A. No. 557 of 2006. case in nut-shell is this. respondents in above appeals are members of Saboo group. Groz Beckert Saboo Ltd. was joint venture between respondents and M/s. Theodor Groz and Sohne and Ernst Beckert Nadelfabrik Commandit Gesellschaft, partnership firm in Germany (Groz Beckert group). Saboo group and Groz Beckert group held 40 per cent. and 60 per cent. shares of equity capital of Groz Beckert Saboo Ltd., respectively. Disputes arose between two groups leading to Saboo group filing petition for oppression and mismanagement under sections 397 and 398 of Companies Act, 1956. petition was dismissed. Saboo group filed appeal under section 10F of Companies Act, 1956, before Delhi High Court. matter was ultimately settled in terms of share purchase agreement dated January 21, 1993. Rs. 400 was stated to be consideration for sale of all shares held by Saboo group to Groz Beckert group. agreement also contained restrictive/negative covenants given by Saboo group. respondents contended that they were entitled to apportion sum of Rs. 100 out of Rs. 400 as consideration for negative covenants. This claim was rejected by Assessing Officer and Commissioner of Income-tax (Appeals) but was allowed by order of Tribunal impugned in this appeal. We have held that although agreement did not bifurcate consideration towards various covenants in agreement, assessee was entitled to bifurcate same and apportion part thereof towards negative covenants. matter, in our view, is covered in respondents' favour by judgment of Supreme Court. This is also view taken by several other High Courts. On facts, we have held that amount of Rs. 100 out of Rs. 400 apportioned towards negative/restrictive covenants was in fact on conservative side. In arriving at these conclusions we have also dealt with certain other issues. respondent filed return of income of Rs. 5,55,280. Assessing Officer assessed respondent's income at Rs. 41,22,020. respondent challenged order before Commissioner of Income-tax (Appeals) on various grounds including those that are subject matter of present appeal. Commissioner of Income-tax (Appeals) dismissed appeal. Tribunal allowed respondent's appeal against this order. appeal was admitted on following substantial question of law: "Whether, on facts and in circumstances of case, hon'ble Income-tax Appellate Tribunal is justified in law in treating sum of Rs. 100 per share as capital receipt not chargeable to tax because as per provisions of section 48, entire receipts on sale of shares are chargeable to tax?" In 1959, one R. K. Saboo had obtained from Government of India industrial licence for manufacture of hosiery needles. financial and collaboration agreement was entered into between R. K. Saboo and M/s Theodor Groz and Sohne and Ernst Beckert Nadelfabrik Commandit Gesellschaft, partnership firm in Germany. By letter dated November 21, 1959, Government of India approved collaboration agreement. said R. K. Saboo and Groz Beckert group entered into agreement to form and promote private company limited by shares in India. Accordingly, on October 15, 1960, Groz Beckert Saboo Ltd. was incorporated which later became deemed public limited company under section 43A of Companies Act, 1956. Groz Beckert group held 60 per cent. shares and said Saboo group, i.e., respondents held 40 per cent. shares of equity capital. In or about year 1988 disputes and differences arose between Groz Beckert group and Saboo group. On January 22, 1992, Saboo group filed petition under sections 397 and 398 of Companies Act, 1956, against Groz Beckert group for mismanagement and oppression of minority shareholders before Company Law Board at New Delhi. Company Law Board by order dated October 22, 1992, rejected petition and directed Saboo group to sell its 40 per cent. shares in Groz Beckert Saboo Ltd. to Groz Beckert group at value to be determined by M/s. S. B. Bilimoria and Company, chartered accountants. Saboo group filed appeal under section 10F of Companies Act, 1956, before Delhi High Court in which interim order staying operation of order of Company Law Board was passed. members of Saboo group and Groz Beckert group settled matter in terms of share purchase agreement dated January 21, 1993. Groz Beckert group is referred to therein as "purchaser" and members of Saboo group are referred to therein as "sellers". Each of members of Saboo group agreed to sell, transfer, assign and deliver to purchaser, i.e., Groz Beckert group their shares having nominal value of Rs. 10 per share at price of Rs. 400 per share aggregating to 17.60 crores. sale price of shares was inclusive of all dividend rights. Clause 1.6 of agreement provided that it was fundamental condition and essence of contract that sale would be of entire 440,000 equity shares owned by Saboo group. relevant provisions of share purchase agreement are as under:... "In consideration of premises and respective representations, warranties, covenants, agreements and indemnities herein contained, parties hereto agree as follows:... 5.5 Non-competition: For period of five years after closing date, neither sellers nor any firms, companies or other entities owned or controlled by sellers will directly or indirectly engage anywhere in India in any business similar to or in competition with business of company as now conducted, or have any interest, directly or indirectly, in any such business. 5.6 Employees: For period of five years after closing date, neither sellers nor any of its affiliates or subsidiaries will: (a) hire any employee of company or induce or attempt to induce any employee of company to leave its employ, or in any way interfere with relationship between company and any of its employees. (b) induce or attempt to induce any supplier, licensee, distributor, customer, or other business relation of company to cease doing business with it or in any way interfere with relationship between any customer or business relation and company, or (c) do any other act detrimental to company or its affiliates or business of any of them. 5.7 For period of five years after closing date, neither purchaser nor any of its affiliates or subsidiaries will: (a) hire any employee of sellers or of any firms, companies or entities owned or controlled by sellers or attempt to induce any employee to leave his employ, or in any way interfere with relationship with such employees. (b) induce or attempt to induce any supplier, licensee, distributor, customer, or other business relation of sellers or any firm, companies or any entities owned or controlled by sellers to cease doing business with it or in any way interfere with relationship with them; or (c) do any other act detrimental to sellers or any firms or companies or entities owned and controlled by sellers, its affiliates or business of any of them. 5.8 Intellectual property rights: From after closing, sellers will not use or disclose to any third party any confidential information relating to company or its business (including customer lists). Sellers shall not use and shall do nothing to challenge or otherwise impair trade name, logos and trade marks and other intellectual property of company or purchaser... 6.4 This agreement will be filed by parties in appeal pending in High Court of Delhi at New Delhi being Appeal No. 23 of 1992 with request to hon'ble High Court to take same on record and to adjourn appeal to date after August 31, 1993, on which date appeal shall be withdrawn and disposed of upon fulfilment of terms of this agreement and escrow agreement." respondents contended that out of sum of Rs. 400 per share, sum of Rs. 100 ought to be apportioned as consideration on account of negative covenants stipulated in share purchase agreement. They contended that said sum of Rs. 100 per share would be on account of capital receipts for agreeing to negative covenants under share purchase agreement and same being capital in nature was not chargeable to tax. To justify basis and quantum of this claim for apportionment, respondent filed valuation report of chartered accountants M/s. Vaish and Associates which valued shares at 93.12 as per break-up value as on March 31, 1993. appellants, accordingly, claimed deduction of Rs. 100 out of total sum of Rs. 400 per share. Assessing Officer, however, disallowed same. He held that respondent-assessee was not entitled to split-up value of shares as stipulated in share purchase agreement. Assessing Officer held that there was no split-up of price of Rs. 400 in share purchase agreement and that there was no documentary proof that Rs. 100 out of Rs. 400 per share was towards negative covenants. Assessing Officer noted judgments of Supreme Court and Madras High Court and observed that in those cases sale of business and transfer of management or termination of agency and compensation for its transfer and refraining from competition was treated as capital receipt. Curiously, however, he held that special provisions of Income-tax Act, namely, sections 17 and 28(ii) supersede principles. He, therefore, refused to follow judgments. We will deal with section 28(ii) of Act later. Referring to above provision of share purchase agreement, he held that Groz Beckert group after paying Rs. 400 per share would have been foolish not to take assurances contained in above provisions. It was contended even before us that these provisions were insisted upon by Groz Beckert group only out of abundant caution. Assessing Officer also held on facts that bifurcation on account of negative covenants had not been established. This contention was reiterated before us and we will also deal with same later. He further held that price of Rs. 400 was sale price of each share and that negative covenants merely followed upon Groz Beckert group taking over management. He observed that if there were to be apportionment of sale consideration, directors who relinquished office would get higher amount than other members of Saboo group. It was contended before us that in fact there was no apportionment. Commissioner of Income-tax (Appeals) held that respondent in I. T. A. No. 557 of 2006 was neither director nor employee of company; that she was not technical expert; that sale of shares could not have element of managerial control. It was held that as respondent was not director or employee of company, she could not have any element of managerial control and that she did not have any expertise to run venture similar to one run by purchaser of shares, i.e., Groz Beckert group. He further concluded that restrictive covenant was not applicable to respondent in I. T. A. No. 557 of 2006. It was, therefore, held that entire amount of Rs. 400 per share was received against sale of share and Assessing Officer had rightly treated entire amount as part of capital receipt liable for capital gains. It is not necessary at this stage to refer to order of Tribunal which we have upheld. We will refer to same later. Ms. Dhugga, learned counsel appearing on behalf of appellant. submitted as follows: (I) There being no bifurcation in agreement between value of share and value of negative covenants, respondent-assessee was not entitled to apportionment thereof for purposes of assessment under Income-tax Act. (II) There was in fact no consideration payable in respect of negative covenants. (III) order is perverse. (IV) In any event, consideration for negative covenants under clause 5.5 is assessable to tax under section 28 of Act. Re: I There being no bifurcation in agreement as regards value of share and value of negative covenants, respondent-assessee was not entitled to apportionment thereof for purposes of assessment under Income-tax Act Ms. Dhugga's, absolute proposition that assessee is not entitled to seek bifurcation of consideration stipulated in share purchase agreement merely because agreement does not provide for same is not well founded. In our view, assessee is entitled to seek bifurcation of consideration mentioned in agreement. Whether part of consideration was paid in respect of particular promise or not is question of fact which must necessarily depend on facts of each case. Ms. Suri's reliance upon judgment of Division Bench of Bombay High Court in Baijnath Chaturbhuj v. CIT [1957] 31 ITR 643 (Bom), is well founded. In that case, managing agency of Gujarat Cotton Mills Ltd. was held by firm of Shantilal Bhagwandas and Co. and by agreement dated January 18, 1938, said firm assigned managing agency and 4,736 shares of company to Sheth Peeramal Chaturbhuj for Rs. 7,51,000. By agreement dated September 7, 1946, Peeramal Girdharlal and Co. agreed to relinquish their managing agency rights and to get M/s. Chaturam and Sons appointed managing agents and to sell 65,012 shares of company at price of Rs. 65 per share. assessee was partner in Peeramal Girdharlal and Co. and Taxing Department sought to assess him to tax in respect of capital gains for assessment year 1948-49 contending that sale price of each share should be taken at Rs. 65, i.e., price mentioned in agreement. assessee contended that market price of shares on date of agreement was Rs. 46 per share and it is that price which ought to be taken into consideration for determining capital gains. Tribunal accepted Department's contention which led to reference before Division Bench. Chief Justice Chagla speaking for court held (page 648): "Now, Tribunal has found as fact, and there can be no dispute about it, that main object or rather only object of agreement of September 7, 1946, was to get purchasers of these shares appointed managing agents of company. Tribunal also points out in its order that this was not ordinary agreement of purchase and sale of shares of company entered into in ordinary course of business, and only reason why it has rejected assessee's contention was that parties did not apportion price of Rs. 65 to shares and to managing agency. Under section 12B(2) for purpose of computing capital gain full value of consideration for which sale, exchange or transfer of capital asset is made has to be taken into account, and short question that we have to consider is: What is full value of shares which were sold by assessee and in respect of which he made capital gain? It is erroneous to suggest that full value is necessarily value which parties place upon capital asset. full value must be true value, not any artificial value, which parties for any purpose may assign to particular capital asset. Here we have evidence that these shares were marketable and they had market price which was Rs. 46 per share. agreement also makes it clear that it was composite agreement by which not merely shares were being sold but shares and managing agency rights. Therefore, consideration paid by purchasers, viz., Rs. 65 per share, was not consideration paid for shares alone but it was consideration that was paid for shares and also for relinquishment of managing agency by vendors. It is therefore not possible to accept contention that full value of shares within meaning of section 12B(2) of Act was Rs. 65 per share. full value was market value of Rs. 46 per share and additional amount was paid by purchasers because they obtained not only shares but also important right to manage Gujarat Mills Co. Ltd. It is difficult to understand how mere fact that parties have not apportioned consideration between two assets which were being dealt with by this agreement can make any difference to rights of parties. position might have been different if market value of shares could not be ascertained. Then it might be said that it is difficult to put proper value upon shares and to put proper value for consideration of assignment or relinquishment of managing agency. But when market value is available and when it is known for what price these shares could be purchased or sold, there is no difficulty whatsoever in apportionment. Mr. Joshi's contention is that capital asset which was being sold and in respect of which capital gain was made was not merely shares but also managing agency agreement, and therefore if Rs. 65 were obtained by purchasers they obtained it in respect of capital asset and whole of capital gain must be brought to tax. Now, it is not case of Taxing Department and it has never been their case that capital asset in respect of which capital gain was made by assessee and which is sought to be taxed was shares and managing agency. whole of reference is based upon fact that only capital asset we are concerned with is shares and not managing agency. Therefore, we must separate managing agency from shares in considering what is value to be put upon shares. Let us test attitude taken up by Department from this point of view. Assuming that parties had put Rs. 5 or Rs. 10 as value of shares and they had valued managing agency for balance of consideration, would Department have accepted artificial value put by parties upon shares if that value was far below market value? position is same here. parties have put upon shares value which is much higher than market value. Admittedly, it is artificial value and it is artificial because value put upon shares is not value of shares alone but it is composite consideration paid by purchasers for obtaining shares and also acquiring managing agency. Under circumstances, in our opinion, for purposes of section 12B(2) sale price of shares should be taken at Rs. 46 per share and not Rs. 65 per share." (emphasis supplied). We are in respectful agreement with judgment. In particular we agree that parties not having apportioned consideration between two or more that parties not having apportioned consideration between two or more assets can make no difference to right of assessee to seek apportionment of consideration in respect of each of them. We see no reason in principle to prevent assessee from doing so. value to be ascribed to each transaction must obviously depend upon evidence and facts in each case. tax of whatever nature, must be levied on basis of true value of asset of transaction and not merely on basis of value ascribed to it by assessee. Indeed, view to contrary could cause severe prejudice to Revenue itself. To accept contention would enable assessees to ascribe artificial values to assets enabling them to avoid tax. As noted by Division Bench in Baijnath Chaturbhuj's case, agreement indicated two distinct assets, namely, shares and managing agency. In case before us, negative covenant and shares are independent and distinct assets. It was possible to have separate and independent agreement in respect of each of them. agreement in terms of negative covenant contained in clause 5.5 did not flow out of agreement to sell shares. Each of these agreements could have been arrived at independent of others. Each of agreements could have been arrived at without and even in absence of other. negative covenant could have been agreed to by members of Saboo group without having sold their shares and members of Saboo group could have sold their shares without agreeing to negative covenants. It was, therefore, not only permissible but necessary to apportion consideration towards each of assets provided of course it is possible to ascertain value of each of assets. Bench of three learned judges of Supreme Court in CIT v. Best and Co. (P.) Ltd. [1966] 60 ITR 11 (SC), dealt with this very issue. Having found that apart from giving up agency, parties had also entered into restrictive covenants, Supreme Court held (page 22): "We, therefore, hold that compensation agreed to be paid was not only in lieu of giving up of agency but also for assessee accepting restrictive covenant for specific period... In present case, covenant was independent obligation undertaken by assessee not to compete with new agents in same field for specified period. It came into operation only after agency was terminated. It was wholly unconnected with assessee's agency terminated. We, therefore, hold that that part of compensation attributable to restrictive covenant was capital receipt and hence not assessable to tax. next question is whether compensation paid is severable. If compensation paid was in respect of two distinct matters, one taking character of capital receipt and other of revenue receipt, we do not see any principle which prevents apportionment of income between two matters. difficulty in apportionment cannot be ground for rejecting claim either of revenue or of assessee. Such apportionment was sanctioned by courts in Tilley v. Wales (H. M. Inspector of Taxes) [1943] 11 ITR (Suppl) 69 (HL); [1942] 25 TC 136 (HL) Carter v. Wadman (H. M. Inspector of Taxes) [1946] 28 STC 41, and T. Sadasivam v. CIT [1955] 28 ITR 435 (Mad). In present case apportionment of compensation has to be made on reasonable basis between loss of agency in usual course of business and restrictive covenant. manner of such apportionment has perforce to be left to assessing authorities." (emphasis supplied). judgment is complete answer to Ms. Dhugga's submission. Ms. Suri, then relied upon judgment of Division Bench of Madras High Court in Parry and Co. Ltd. v. Deputy CIT [2004] 269 ITR 177 (Mad). In that case, assessee was engaged in trading and service activities as cleaning and forwarding agents, etc. Pursuant to certain agreements, company named HMM Ltd. engaged assessee as its selling agent in case of diverse products. agreements were renewed. parties, however, entered into agreement for premature termination of selling agency/distribution arrangement. HMM Ltd. agreed to pay certain amounts in instalments in consideration of assessee's accepting premature termination of agreement. In consideration thereof, assessee, inter alia, agreed not to accept or engage itself in any selling/distribution arrangements of any products of any other manufacturer as would compete with said food products and/or said toiletries. assessee had also agreed to other clauses such as confidentiality clause. assessee received amounts due under agreement. Assessing Officer treated same as revenue receipts which were taxable. Commissioner of Income-tax confirmed order. Tribunal held 20 per cent. of total compensation as attributable to restrictive covenant and obligations and directed that amount be taken as capital receipt and not liable to tax as income under section 28(ii)(c) of Act and deleted addition to that extent. question in assessee's appeal to High Court was whether compensation would restrict capital receipt or revenue receipt. High Court held that compensation was in consideration of pre-mature termination of selling agency/ distributorship agreement and also in respect of restrictive covenants. Relying upon judgment of Supreme Court in case of CIT v. Best and Co. P. Ltd. [1966] 60 ITR 11 (SC), Division Bench upheld apportionment. Ms. Suri also relied upon judgment of Division Bench of Patna High Court in Raghubar Narain Singh v. CIT [1984] 147 ITR 447 (Patna). We will refer to this judgment shortly while referring to judgment cited by Ms. Dhugga. submission that assessee is not entitled to apportionment towards price of shares and price of restrictive covenants merely because share purchase agreement itself did not bifurcate same, is rejected. Where agreement between parties indicates that lump sum consideration was in respect of two or more promises, it is liable to be bifurcated and apportioned between each of assets. At times bifurcation operates in favour of assessee and at times in favour of Revenue. In whose favour it operates is irrelevant. In such cases, consideration must be apportioned towards each of assets if it is possible to do so. Ms. Dhugga on other hand relied upon judgment of Division Bench of Madras High Court in Venkatesh (Minor) v. CIT [2000] 243 ITR 367 (Mad). question before High Court under reference was whether any part of sale consideration received by assessees for sale of their shares was to be excluded from computation of longterm capital gains on ground that part of consideration does not represent value of shares sold but constitutes consideration for sale of right to control company with aid of shares sold in two companies-Anglo French Textiles Ltd. and Best and Co. (Pondicherry) Pvt. Ltd. shares were held by all assessees who belonged to same family. shares were sold in two companies at rate of Rs. 601 per share and Rs. 935 per share although prevailing market value of those shares was 219 and 185 per share. Income-tax Officer computed difference between value of shares received by assessees under agreement and cost of acquisition of these shares and treated same as long-term capital gains and, accordingly, assessed that sum to tax. Income-tax Officer rejected assessee's contention that sale price did not wholly pertain to value of shares held by them and that part of amount received by them was consideration for transfer of controlling interest of those companies to vendees which was evidenced by fact that assessees who were directors would resign from boards of two companies and induced vendees companies. Ms. Dhugga relied upon following observations of Division Bench (page 370): "The argument for assessees that controlling interest in company is capable of being transferred separately, apart from transfer of shares is wholly untenable. fact that vendor has controlling interest and is in position to place vendee in control of company by transferring all his shares or such part as would enable vendee to exercise control over company with aid of shares so transferred would only enhance value of shares transferred. price paid by vendee for acquisition of such shares remains price of those shares though price so paid is higher than market price. Controlling interest is but incidence of shareholding and has no independent existence. Similar view was taken by Madhya Pradesh High Court in case of Smt. Maharani Ushadevi v. CIT [1981] 131 ITR 445 (MP), wherein also it was pointed out that controlling interest in company is incident arising from holding of particular number of shares in company and that such controlling interest cannot be transferred without transferring shares." judgment does not support Ms. Dhugga's contention that if due to negative covenants price of share is higher, it still is part of and constitutes price of shares and is not independent of value of shares. controlling interest may well be part of value of shares for it emanates and is dependent upon shares themselves. As held by Division Bench, controlling interest is incidence of shareholding and has no independent existence. We have already held that negative covenant was distinct right independent of right of ownership of shares. case is, therefore, clearly distinguishable from one before us. Division Bench then referred judgment of Patna High Court in Raghubar Narain Singh v. CIT [1984] 147 ITR 447 (Patna) wherein it was held that price received by vendor who happened to be managing director and who had agreed under agreement to delegate his power to vendee was not consideration for sale of shares alone and that part of consideration was price for delegation of power and, therefore, was not to be taken into account while computing capital gains of shares. Division Bench differed with view of Patna High Court to effect that powers of managing director could be sold in such manner and held that such illegal sales would not entitle assessees to claim exemption of tax on capital gains arising from sale of shares. We are not concerned with such case at all and, therefore, do not express any opinion regarding same. Suffice it to note, however, that Division Bench of Madras High Court did not hold that consideration cannot be apportioned even if court comes to conclusion that two distinct assets are sold. Division Bench of Patna High Court endorsed principle of bifurcation and apportionment. Ms. Dhugga then relied upon following observations of Madhya Pradesh High Court in Smt. Maharani Ushadevi v. CIT [1981] 131 ITR 445 (MP) (page 449): "Now, Tribunal has found that assessee had in fact paid price of Rs. 100 per share when assessee acquired block of 42,000 shares of company. It is true that Tribunal has also found that market price of shares of company at material time was Rs. 76. But, if for acquiring block of 42,000 shares assessee was in fact required to pay Rs, 100 per share, then so far as assessee was concerned, cost of acquisition of each share was Rs. 100. Tribunal, however, held that sum of Rs. 100 did not represent cost of acquisition of shares to assessee because, assessee acquired, in addition to shares, controlling interest in company and, therefore, excess amount paid by assessee over market price of share represented price of controlling interest. This view of Tribunal proceeds on assumption that controlling interest is distinct capital asset which can be acquired or transferred independently of shares. We see no justification for view. Controlling interest is incidence arising from holding particular number of shares in company. It cannot be separately acquired or transferred. It flows from fact that number of shares are held by person. If for acquiring that number of shares, person is required to pay more than market price of share and if transaction is genuine, as has been found in present case, then, really speaking, cost of acquisition of block of shares purchased by assessee is that which she has in fact paid for holding that block... other decision relied upon by Tribunal is Baijnath Chaturbhuj v. CIT [1957] 31 ITR 643 (Bom). In that case, it was found that consideration received by assessee was really composite consideration for transfer of shares and assignment of managing agency. No doubt, there can be case of composite consideration but in that case there should be two distinct assets, each capable of being acquired or transferred separately. In our opinion,'controlling interest' by itself cannot be acquired or transferred. It is incidence arising out of holding particular number of shares and if for holding that number assessee was required to purchase block of 42,000 shares at price of Rs. 100 for each share then Rs. 100 would, in our opinion, be cost of acquisition of share so far as assessee is concerned. For these reasons, our answer to question refrained by us in M. C. C. No. 411 of 1976 is in negative and against Department." These observations do not support Ms. Dhugga's submission. Division Bench only held that controlling interest is incidence arising from holding particular number of shares in company and cannot be separately acquired particular number of shares in company and cannot be separately acquired or transferred. It is incidence or consequence of holding of said shares. In fact, judgment is against Ms. Dhugga's submission as Division Bench accepted view taken by Division Bench of Bombay High Court in Baijnath Chaturbhuj's case (supra). Division Bench held as under (page 449): "The other decision relied upon by Tribunal is Baijnath Chaturbhuj v. CIT [1957] 31 ITR 643 (Bom). In that case, it was found that consideration received by assessee was really composite consideration for transfer of shares and assignment of managing agency. No doubt, there can be case of composite consideration but in that case there should be two distinct assets, each capable of being acquired or transferred separately. In our opinion,'controlling interest' by itself cannot be acquired or transferred. It is incidence arising out of holding particular number of shares and if for holding that number assessee was required to purchase block of 42,000 shares at price of Rs. 100 for each share then Rs. 100 would, in our opinion, be cost of acquisition of share so far as assessee is concerned. For these reasons, our answer to question refrained by us in M. C. C. No. 411 of 1976 is in negative and against Department." Division Bench, therefore, in fact accepted view that even in case of composite consideration there can be apportionment provided two distinct assets each capable of being acquired or transferred separately are sold or purchased. Lastly, Ms. Dhugga relied upon following observations of Supreme Court in Vodafone International Holdings B.V. v. Union of India [2012] 341 ITR 1 (SC); [2012] 6 SCC 613 (page 58 of 341 ITR): "As stated, CGP was treated in Hutchison structure as investment vehicle. As general rule, in case where transaction involves transfer of shares lock, stock and barrel, such transaction cannot be broken up into separate individual components, assets or rights such as right to vote, right to participate in company meetings, management rights, controlling rights, control premium, brand licences and so on as shares constitute bundle of rights (See Charanjit Lal Chowdhury v. Union of India, AIR 1951 SC 41; [1950] 1 SCR 869, Venkatesh (Minor) v. CIT [2000] 243 ITR 367 (Mad) and Smt. Maharani Ushadevi v. CIT [1981] 131 ITR 445 (MP). Further, High Court has failed to examine nature of following items, namely, non-compete agreement, control premium, call and put options, consultancy support, customer base, brand licences, etc. On facts, we are of view that High Court, in present case, ought to have examined entire transaction holistically. VIH has rightly contended that transaction in question should be looked at as entire package. items mentioned hereinabove, like, control premium, noncompete agreement, consultancy support, customer base, brand licences, operating licences, etc. were all integral part of holding subsidiary structure which existed for almost 13 years, generating huge revenues, as indicated above. Merely because at time of exit capital gains tax becomes not payable or exigible to tax would not make entire'share sale' (investment) sham or tax avoidant. High Court has failed to appreciate that payment of US $11.08 billion was for purchase of entire investment made by HTIL in India. payment was for entire package. parties to transaction have not agreed upon separate price for CGP share and for what High Court calls as'other rights and entitlements' (including options, right to noncompete, control premium, customer base, etc.). Thus, it was not open to Revenue to split payment and consider part of such payments for each of above items. essential character of transaction as alienation cannot be altered by form of consideration, payment of consideration in instalments or on basis that payment is related to contingency (options, in this case), particularly when transaction does not contemplate such split up. Where parties have agreed for lump sum consideration without placing separate values for each of above items which go to make up entire investment in participation, merely because certain values are indicated in correspondence with FIPB which had raised query, would not mean that parties had agreed for price payable for each of above items. transaction remained contract of outright sale of entire investment for lump sum consideration (see Commentary on Model Tax Convention on Income and on Capital (OECD, January 28, 2003)) as also judgment of this court in CIT v. Mugneeram Bangur and Co. (Land Department) [1965] 57 ITR 299; AIR 1966 SC 50. Thus, we need to "look at" entire ownership structure set up by Hutchison as single consolidated bargain and interpret transactional documents, while examining offshore transaction of nature involved in this case, in that light." These observations in Vodafone International Holdings B.V. v. Union of India, case (supra) cannot be read in isolation. Moreover, even these observations do not support Ms. Dhugga's submission that merely because written agreement entered into between parties does not bifurcate consideration and apportion same, authorities and/or assessees are precluded from doing so. Indeed, issue, as it arises before us, was not considered by Supreme Court. Supreme Court considered aspect in entirely different context. To understand these observations, it would be necessary to read judgment in Vodafone International Holdings B.V. v. Union of India (supra) as whole. dispute related to acquisition by Vodafone International Holdings (VIH) of entire share capital of CGP Investments (Holdings) Ltd. (CGP) by agreement dated February 11, 2007. Revenue contended that purpose of agreement was to acquire 67 per cent. controlling interest in another company, Hutchison Essar Ltd. (HEL). CGP in turn indirectly held through other downstream companies shares in HEL as well as other rights, such as, option to acquire further shares in HEL. matter concerned section 9(1)(i), namely, transfer of capital asset situate in India. It is important to note that lead judgment delivered by Chief Justice repeatedly noted and held that in that case court was concerned with sale of shares and not with sale of assets item-wise. court dealt with each of items that Revenue contended had been acquired by VIH. It was held that rights did not flow from share purchase agreement; that some of rights, such as, rights of influence/persuasion cannot be construed as right in legal sense. For instance, although holding company would, by virtue of its share holding, have persuasive effect in respect of management of its downstream subsidiaries, it did not have enforceable right to do so in view of principles of corporate governance in paragraph 111. It was held that group holding company had no legal right to direct its downstream companies in matter of voting, nomination of directors and management rights. It was held that various other rights had been acquired by VIH through acquisition of CGP share and not through execution of share-purchase agreement. After having analysed each of ingredients, which were alleged to have been separately transferred, Supreme Court held (page 48 of 341 ITR): "For above reasons, we hold that under HTIL structure, as it existed in 1994, HTIL occupied only persuasive position/influence over downstream companies qua manner of voting, nomination of directors and management rights. That, minority shareholders/ investors had participative and protective rights (including RoFR/ TARs, call and put options which provided for exit) which flowed from CGP share. That, entire investment was sold to VIH through investment vehicle (CGP). Consequently, there was no extinguishment of rights as alleged by Revenue." Another item that Revenue contended had been transferred separately was option qua shares of various companies. It was held that pending exercise of options, mere options did not constitute management rights. In judgment under appeal, Bombay High Court had come to conclusion that transfer of CGP share was not adequate in itself to achieve object of consummating transaction between HTIL and VIH and that intrinsic to transaction was transfer of other "rights and entitlements" which rights and entitlements constituted in themselves "capital assets" within meaning of section 2(14) of Act. High Court held that VIH acquired CGP share with other rights and entitlements. VIH on other hand contended that it had acquired all rights through CGP share alone. It was on consideration of facts of that case that Supreme Court come to conclusion that matter concerns "a share sale" and not asset sale. It was, therefore, found as matter of fact that there was no transfer of "capital asset" other than by way of transfer of CGP share. Supreme Court did not hold that even if it had come to conclusion that case concerns sale of share and other assets, there could be no bifurcation and apportionment of consideration stipulated merely because share purchase agreement did not itself bifurcate consideration qua independent components. Our view is, therefore, not inconsistent with judgment in Vodafone's case (supra). As we noted earlier, this is view of Bench of three learned judges of Supreme Court in CIT v. Best and Co. P. Ltd. (supra), which dealt with very point in issue before us. We are, therefore, in any event bound by judgment in CIT v. Best and Co. P. Ltd. (supra). first contention, therefore, stands rejected. Tribunal was right in coming to conclusion that consideration ought to be bifurcated and part thereof apportioned towards restrictive covenants. Re: (II) There was in fact no consideration payable in respect of negative covenants Ms. Dhugga contended that in any event in present case there was in fact no consideration payable for any of covenants stipulated in clause 5 including for negative covenants contained in clause 5.5. Clause 5.5 prohibited sellers, i.e., members of Saboo group and firms, companies and other entities owned and controlled by them from directly or indirectly engaging anywhere in India in any business similar to or in competition with business of company, i.e., Groz Beckert Saboo Ltd. or from having any interest, directly or indirectly, in any such business. In support of this contention, Ms. Dhugga contended that members of Saboo group did not have technical expertise to carry on such business in competition with business of Groz Beckert Saboo Ltd. In this regard, she relied upon order of Company Law Board dated October 22, 1992, recording submissions on behalf of Saboo group, inter alia, to effect that due to non-co-operation of Groz Beckert group to take effective steps for "indigenisation of raw material supply and transfer of technology to company, proposal of Saboo group that more manufacturers of raw material should be contacted was defeated. This, according to her, indicates admission on behalf of Saboo group that it was Groz Beckert group that was in possession of technology and that Saboo group did not have technology necessary to conduct such business. Further, this submission according to her, established that Saboo group had not acquired technical expertise for it is their own case that Groz Beckert group had not transferred same to Groz Beckert Saboo Ltd. She also relied upon observations in order of Company Law Board to effect that under section 29 of Foreign Exchange Regulation Act, 1973, company in which non-residents holding is more than 40 per cent. (as in case of Groz Beckert Saboo Ltd. wherein Groz Beckert group had 60 per cent. shares holding) would require permission of Reserve Bank of India to carry on business in India. In 1973-74, Government required Groz Beckert group to reduce its equity ownership in company but considering nature of technology, Reserve Bank of India permitted Groz Beckert group to retain 60 per cent. of equity and Saboo group supported same. This, according to Ms. Dhugga, indicated that technology was of high level and valuable and that it is Groz Beckert group that was in possession of same. She also relied upon observations in order of Company Law Board that in petition Saboo group alleged that imported raw material and consumables and most of imported machinery were purchased by company, i.e., Groz Beckert Saboo Ltd. from Groz Beckert group. Groz Beckert group had ensured that no effective steps were taken for indigenisation of raw material supply and that Groz Beckert group had taken steps to ensure that Saboo group remained totally dependent on imported supplies. We will assume that members of Saboo group did not possess technical expertise to run similar business themselves. That does not render clause 5.5 meaningless. It is of vital importance to note that clause 5.5 prevented members of Saboo group from directly or indirectly engaging in similar business or in competition with business of Groz Beckert Saboo Ltd. possession of technical expertise required to manufacture product is not necessary to engage in any business similar to or in competition with business of another. term "engage" is of wide import. members of Saboo group or any one of them could engage in such business merely as investors. They could in turn acquire technical expertise from another party. They could enter into joint venture with another party that has technical expertise to produce similar goods and to engage in similar competitive business. mere fact that none of members of Saboo group had technical expertise themselves to manufacture goods is entirely irrelevant. Their ability to engage in such business is not dependent on their possessing technical expertise required for running such business. Clause 5.5 did not prevent members of Saboo group merely from using their technical expertise for purpose of engaging anywhere in India in any business similar to or in competition with business of Groz Beckert Saboo Ltd. It prevented them from engaging anywhere in India in any business similar to or in competition with business of Groz Beckert Saboo Ltd. or to have any interest directly or indirectly in any such business. Interest as investor would fall within ambit of clause. If members of Saboo group or any of them invested in such business, they could have been prevented from doing so in view of clause 5.5. Faced with this, Ms. Dhugga submitted that clause 5.5 did not provide for any penalty for breach thereof. This is entirely irrelevant. It does not indicate that clause 5.5 is meaningless or without any value. If there was breach of clause 5.5, Groz Beckert group or company, i.e., Groz Beckert Saboo Ltd. could have filed action to prevent them from doing so by enforcing negative covenants. They could also have sought damages for breach of covenants. contention that clause 5.5 is meaningless and of no value is, therefore, rejected. Ms. Dhugga further submitted that in fact there was breach of negative covenants as members of Saboo group had taken over/ poached some of employees of Groz Beckert Saboo Ltd. This is also irrelevant. Assuming that there was breach, that by itself would not indicate that clause was sham or bogus or was never intended to be acted upon. Merely because Groz Beckert Saboo Ltd. may not have filed any action to enforce negative covenants it does not necessarily follow that covenant was sham and was not intended to be acted upon. They may have refrained from doing so for variety of valid reasons. contention that covenants/negative covenants were sham, bogus and were never meant to be acted upon, is belied by at least one fact. As noted in order of Company Law Board, several disputes had arisen between parties including as regards expansion programme, transfer of technology, failure of Groz Beckert group to give commitment to buy back needles at stipulated price, frequent use of casting vote by chairman, illegal import of spare parts at inflated cost through Groz Beckert group and failure of Groz Beckert group to take steps for indigenisation of raw material supply and transfer of technology to Groz Beckert Saboo Ltd. One important dispute relates to use of trade mark. Groz Beckert Saboo Ltd. had exclusive perpetual licence for unconditional use of trade mark "Groz- Beckert" and other G. B. trade marks/trade names for exports and domestic sales. Saboo group allegedly with knowledge and consent of Groz- Beckert group, registered its own trade mark "Groz-Beckert Saboo Ltd. (Label)" in respect of needles falling in class 26 and that trademark was mainly used in domestic sales. According to Groz Beckert group, application for registration of that trade mark was made without prior consultation and it objected to registration thereof. Groz Beckert Saboo Ltd. ultimately withdrew its application on condition that Groz Beckert group would register its trademark in its own name and Groz Beckert Saboo Ltd. would be permitted to continue to use trade mark in India. Accordingly, lawyers of Groz Beckert Saboo Ltd. withdrew application for registration and said R. K. Saboo confirmed same. There were prolonged negotiations in this regard. There is nothing to indicate that there was no such dispute. In fact, there obviously were several disputes. This is clear from fact that dispute is reflected in petition filed before Company Law Board whereas share purchase agreement was entered into much later, namely, after appeal under section 10F before Delhi High Court. It is obviously in view of these various disputes that various Delhi High Court. It is obviously in view of these various disputes that various clauses were introduced by parties in share purchase agreement. Anyone familiar with such matter would know that agreement is consistent with exercise for resolution of such disputes in corporate matters. negative covenants therein are not at all unusual in such cases. There is nothing to indicate that they were introduced to avoid tax. submission that there was no consideration for negative covenants is, therefore, rejected. Re: III order is perverse Ms. Dhugga further submitted that order is perverse inasmuch as Tribunal failed to take into consideration that even assuming that sum of Rs. 100 could be considered to be consideration for negative covenants contained in share purchase agreement, there was no further bifurcation and apportionment of consideration towards each of covenants/negative covenants contained in various clauses of share purchase agreement. She submitted that value must then be attributed to all covenants/negative covenants such as in clauses 5.6, 5.7 and 5.8 set out earlier. This submission must be rejected for at least two reasons, second more important than first. Firstly, as rightly pointed out by Ms. Suri, this contention was not raised by Assessing Officer. Nor was it raised before Commissioner of Income-tax (Appeals) or before Tribunal. Ms. Dhugga contended that this is pure question of law and Department, therefore, ought to be allowed to raise point before us although it was not raised before Commissioner of Income- tax (Appeals) and Tribunal. Ms. Suri's objection is well founded. There is no justification for allowing appellant to raise this point for first time in appeal before us. Had contention been raised before Commissioner of Income-tax (Appeals) or before Tribunal, respondent could conceivably have had several answers to it. If we allow appellant to raise this contention before us we would be depriving respondents opportunity of adducing evidence to deal with same. This would be unfair to respondents. Secondly, and more important, in facts of this case, it would make no difference even if we were to accept Ms. Dhugga's submission. Ms. Dhugga may be right to extent that there is nothing to indicate that other covenants/negative covenants would be monetarily worthless and that some monetary value ought to be attributed to them. However, this would not be pure abstract question of law or mere inference to which there could be no answer. Tribunal accepted value of shares at 60.24 per share. Tribunal, therefore, rightly held that value of Rs. 100 apportioned towards negative covenants was not such as to warrant interference. We agree. chartered accountant valued shares in three different ways. valuation at 106.90 per share was arrived at on basis of rule 14 of Schedule III to Wealth-tax Act, 1957, of business as whole, at 118.90 per share on yield basis and at Rs. 93.12 on basis of rule 11 of Schedule III to Wealth- tax Act, i.e., breakup value. There is nothing to indicate that valuation report was dishonest or mala fide for any reason. Nor is there anything to indicate that it is unsustainable for any reason. It is important to note that there is no ground of appeal before us against Tribunal's acceptance of valuation report. appellants themselves have not valued shares. In that event even assuming that some valuation is to be attributed to covenants/negative covenants contained in share purchase agreement other than clause 5.5, it would make no difference. apportionment of sum of Rs. 100 out of Rs. 400 towards clause 5.5 would in any event be reasonable. We agree with findings of Tribunal that in view of above facts apportionment of 25 per cent. of value of shares towards negative covenants was on conservative basis. In circumstances, we do not consider it appropriate to interfere with decision of Tribunal on this ground. Nor do we think it necessary to remit matter to Tribunal for further apportionment. Re: IV: In any event, consideration for negative covenants under clause 5.5 is assessable to tax under section 28 of Act Section 28(ii)(a) and (b) of Act relied upon by Ms. Dhugga reads as under: "28. following income shall be chargeable to income-tax under head'Profits and gains of business or profession',- (i) profits and gains of any business or profession which was carried on by assessee at any time during previous year. (ii) any compensation or other payment due to or received by,- (a) any person, by whatever name called, managing whole or substantially whole of affairs of Indian company, at or in connection with termination of his management or modification of terms and conditions relating thereto; (b) any person, by whatever name called, managing whole or substantially whole of affairs in India of any other company, at or in connection with termination of his office or modification of terms and conditions relating thereto;" Section 28(ii)(a) and (b) are inapplicable to facts of this case. members of Saboo group held only 40 per cent. of equity shares in Groz Beckert Saboo Ltd. Their shareholding even together did not give them right to manage whole or substantially whole of affairs of Groz Beckert Saboo Ltd. terms of collaboration agreement are important. Under collaboration agreement, general administration and management of Groz Beckert Saboo Ltd. was to be in hands of two managing/executive directors with equal powers, one to be nominated by Groz Beckert group and other to be appointed by Saboo group. Both groups were entitled to nominate three directors each. It is important to note that chairman of board of directors was always to be one out of three nominees of Groz Beckert group and chairman was to have casting vote. Further, in respect of ten specified matters, no decision could be taken by board of directors or by company except by unanimous consent of all directors. It cannot be said, therefore, that Saboo group managed whole of affairs of Groz Beckert Saboo Ltd. In this view of matter, it is not necessary to consider whether section 28(ii)(a), (b) of Act applies in view of other certain aspects raised by Ms. Suri. Ms. Dhugga rightly agreed that section 28(va) came into force with effect from April 1, 2003, and, therefore, does not apply to present case which pertains to assessment year 1994-95. contention, therefore, that consideration for negative covenants in 5.5 of share purchase agreement is assessable to tax under section 28 of Act is, therefore, rejected. question of law, is, therefore, answered against Revenue- appellants and in favour of respondents/assessees. appeals are accordingly dismissed but with no order as to costs. *** Commissioner of Income-tax v. Smt. Usha Saboo