2011 (7) TMI 322

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....e facts and circumstances of the case, the Tribunal was right in holding that there is no goodwill attributable, as the manufacture of cement in the newly acquired company would involve problems?   3. Whether in the facts and circumstances of the case, the Tribunal had considered all the parameters that are necessary for the valuation of the goodwill of the purchased company?"   2. The assessment year under consideration is 1991-1992. During the relevant previous year relating to the assessment year 1991-1992, the assessee herein acquired the cement plant from M/s.Coromandel Fertilizers Limited, for a consideration of Rs.105.30 crores. The Assessing Officer viewed that 10% of the said purchase price represented goodwill and ....

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....Tribunal pointed out that the purchase of the cement unit from M/s.Coromandel Fertilizers Limited did not automatically generate any income to the assessee. It had to expend further to acquire the mining rights for lime from the Government apart from restructuring the manufacturing plants for manufacturing operations.   5. Going by the financial loss suffered by the company, the Tribunal held that there was no goodwill left for any valuation at the hands of the assessee. The Tribunal further pointed out that there was shortage of electricity which seriously affected the production of the transferor and right from the start it was a loss making company. Thus, going through the materials the Tribunal came to the conclusion that the qu....

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....e as well as for goodwill. The Commissioner of Income Tax (Appeals) pointed out that the assessee company acquired the brand name along with the other assets. However, as regards goodwill, no value was assigned. Considering the huge loss suffered by the transferor company, the entire consideration was reduced from the value of block of assets. The Tribunal also pointed out that the assessee company got permission from the Central Government for mining rights and executed supplementary lease deed to the Government for extracting lime stone. Thus, on totality of the facts and circumstances, the authorities below held that the Assessing Officer was not justified in assigning the value towards the goodwill which was not there at all as a matter....