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"1) The transaction of shares is not limited to transfer of share of a company but would in effect mean transfer of management of the company to the purchaser with a rider of no interference by the sellers who were also Directors of the company.

2) This transaction of shares would also translate into renunciation of the management by the seller Directors in favor of purchaser. This is clear from Article 2.1 of the agreement. This is further strengthened by Article 5.1.1. of the Agreement which clearly enunciates that the delivery of effective resignation in writing by the Directors (in this case Shri Sumit Taneja) as a part of the activities of completion.

14. Article-5 i.e. activities at completion enlisted the acts and deeds to be done by the sellers and the purchasers:

5.1.1 The Sellers shall do or cause to be done the following acts and deeds:

(a) deliver to the Purchaser effective resignation in writing( if not already tendered) of Mr Harbir Singh Khurana, Mr. Avtar Singh Khurana, Mr. Sumit Taneja and Mr. P.K Taneja as directors on the board of directors of the Company.

16. Taking into consideration the entiret y of facts and circumstances of the case and agreement entered into between the parties as referred to by us in the paras hereinabove, it is apparent that the transaction in question was in the nature of purchase of business by the incoming company. The transaction entered into between the assessee before us as shareholder of M/s Excel Callnet Private Limited and the Managing Directors of M/s Pugmarks Interweb Pvt. Ltd. was not merel y for the transfer of shares of the company but was in fact transfer of management of the company to the purchaser with a rider of non-interference by the sellers who were the Directors of the company. Reference is made to the Article 2.1 of the agreement dated 26.3.2005 wherein the seller i.e. the assessee before us was refrained from day-today management of the business from the date of the agreement. In addition, the sellers i.e. the shareholders of the company were to hand over the E m p l o ye e D a t a b a s e , Products Database, Customer Support, New Client proposals in pipeline, Other prospects and customer's database, Payment Recovery and Customer. Management cases, Contract, Verbal Commitments, Banking Information, software/licenses and any other property that was a c q u i r e d u n d e r t h e t e n u r e o f t h e S e l l e r s w o r k i n g w i t h t h e C o m p a n y. Because of the complexity of the handing over operation by the sellers i.e. the shareholders of the company to the Managing Director of the new c o m p a n y, t h e p a r t i e s e n t e r e d i n t o a g r e e m e n t o n 2 6 . 3 . 2 0 0 5 a n d h a d completed the process on 24.7.2005. If it was a mere sale of the investment by way of shareholding by the assessee then the said exercise was not required. Even the sale consideration agreed upon between the parties including the consideration on account of non-compete covenant was paid in installment over a period of time. Further the transfer of shares in effect translated into renunciation of management by the seller Directors in favour of the purchaser which is apparent from Article 5.1.1 of the agreement which enunciated the delivery of effective resignation in writing by the Directors as part of the activities of the completion. The next point under consideration is the non-compete covenants agreed upon between the parties as per Article 8, under which Article 8.4 c l e a r l y s t a t e d the seller agrees not to engaged in any call centre, business process outsourcing or IT enabled services business in the States of Chandigarh, Pujab, Haryana or Himachal Pradesh within a radius of 100 Kms from Chandigarh for a period of 2 years from the date of this agreement. Further non-compete covenants imposed a restriction upon the seller Directors to directly or indirectly solicit a business that the company has done since its inception without prior written permission of the company. Under Article 8.10 there was renunciation of brand equit y of the company by the sellers in favour of the purchaser as the parties agreed that the sellers will not take advantage of the brand equity of the company by using any names, logos, trademarks, partnerships, affiliations, names etc. As per para 8.11 the sellers cannot use domains that contain the word Excel and would not use or claim the domain name www.Excel.netcom. Article 9 of the agreement further refer to non- solicitation of employees covenant where by the seller will not directly or indirectly solicit, hire, employ, induce or attempt to induce any present or future employee of the company or the purchaser."