2016 (7) TMI 975

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....arise out of the order passed by the Tribunal, dated 6-6-2014. 4. Mr. Tolat has invited our attention to Section 47 (xiv) of the Income Tax Act, 1961. Mr. Tolat submits that computation of income from capital gains and in relation to transactions not regarded as transfer is contemplated by Section 47. In the present case, all preconditions for applicability of the above Clause (xiv) have been fulfilled. Yet, the Tribunal erroneously confirms the view taken by the Assessing Officer and the Commissioner of Income Tax (Appeals). A goodwill has been generated as the running business of the sole proprietary concern has been taken over by a Private Limited Company. It is in these circumstances, all the assets and liabilities of the sole propri....

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....personal balancesheet. According to the assessee, the excess credit balance, namely, the difference between the agreed consideration and the capital balance was accounted as goodwill in the books of the Private Limited Company. Such goodwill is arising on succession. The Assessing Officer found that the goodwill was never created in the books of the proprietary concern and therefore it never became an asset of the sole proprietary concern which was taken over on such succession. It was, therefore, not covered by Section 47(xiv). That is how the Assessing Officer held that the assessee was liable to pay Capital Gain Tax on the shortterm capital gain. That is how Section 45 was attracted. This finding of the Assessing Officer was confirmed in....

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....gnor is entitled does not contain any detail as to the valuation of the good will possessed by the assignor while arriving at a total value of Rs. 3,35,90,640/for which the allotment of 3,35,90,64/shares of Rs. 10 each paid in share capital of the assignee. Though the general wordings contained in the recitals of the said agreement in para 5 as reproduced above covers 'good will' for the transfer of which negotiation has taken place between the assignor and assignee, the assignment deed does not evidence that a good will, valued at Rs. 2,29,89,701/is transferred to the assignee. Moreover, it is not disputed that the alleged good will has never been created in the books of the propriety concern of the assessee. Therefore, the allotme....