TaxTMI 
TaxTMI 
1965 (12) TMI 3
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....ified in holding that the sum of Rs. 33,000 forms part of the assessable profits of the assessee-company ? " The assessee, Indian Machinery Stores (Private) Ltd., is a private limited company having its registered office in Patna and was incorporated with the object of taking over the business carried on by a partnership firm called "Indian Machinery and Mills Stores". By an agreement in writing executed on the 2nd August, 1956, by the assessee-company and the said firm, the former agreed to purchase and the latter agreed to sell and transfer the running business carried on by the partnership firm with all its assets and liabilities including the goodwill as also the book debts and other claims of the firm. The consideration fixed for....
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....ed by the assessee-company. The first clause of the agreement provides : " That the vendors shall sell and the company shall purchase as and on the 1st day of August one thousand nine hundred and fifty-six, FIRSTLY, the goodwill of the said business, trade marks, agencies, concessions, licences, commissions, leases, privileges and titles thereof ; SECONDLY, all structures, outhouses, workshops, sheds and other properties specified in the schedule hereto; THIRDLY, all the plants and machineries, furnitures, patents, vehicles, automobiles, tractors, jeeps, furnishings, tools, implements, stock in trade, etc., to which the vendors are entitled to in connection with the said busines; FOURTHLY, all book debts and other debts and choses-ina....
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....2,60,000 was paid not only on account of the value of the assets mentioned in the schedule minus the liabilities mentioned therein, but also on account of the various other properties mentioned in paragraph No. 1 of the agreement quoted above including the goodwill, etc., for which no separate value was shown in the schedule appended to the agreement. It is no doubt true that the sum of Rs. 2,60,000 was paid by the purchasing company to the vendor-firm. The fact that the said amount was paid by issuing shares in favour of the nominees of the vendors makes no difference. It does not seem to be the case of the department, nor any finding to that effect has been recorded in any of the three orders of the Income-tax Officer, Appellate Assistant....
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....e mentioned on the beginning of that date, that is to say, on the close of the business on the 31st of July, 1956. Moreover, it was not the assessee's case at any stage that there were any figures entered in the books of the vendor-firm on the 1st of August, 1956, different from those entered on the 31st July, 1956. The next sub-mission made on behalf of the assessee was that when in the schedules the value of the stock was shown as Rs. 2,10,285.87 nP., it ,ought to have been taken that the said amount was paid as the value of the stock, and even if it was apparently in conflict with what was provided in clause 4 of the agreement, the specific and definite value of the stock mentioned in the schedule ought to have been given more weight ....