Dear Experts,
Need your advise on the below mwntioned unique case
An US citizen Mr. X agrees to buy 10,000 shares of an Indian Company ABC Pvt Ltd at Rs 10 per share in the year 2005 from its promoter shareholder Mr. Y, for that he gets into a share purchase agreement and also duly transfers purchase consideration of Rs 100,000 to the promoters shareholders account.
But post transfer of amount b0oh parties dispute and transfer of SHares doesnt happen in books of ABC Pvt Ltd.
Now after 10 years of litigation, High Court has awarded Rs 300,000 in favour of Mr. X to be paid by Mr. Y because Mr. Y was at fault and value of Shares have also increased now, apart from that they have also instructed to Mr. Y to pay Rs. 100,000 to Mr. X towards litigation expenses.
Now the situation is that Mr. X will get total of Rs 400,000 (3 Lacs for award & 1 lac for litigation expenses), and shares never got transfered.
Need to know what tax implications Mr. X will have on this payments although shares never got transferred in his name.
Best regards
Lokesh Bahl
CAclubindia
