1953 (10) TMI 38

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....ayana Rao, J. 1. The question raised in this reference is a very short one and does not present much difficulty. The question is: "Whether the payment of ₹ 5000 by the assessee to Mr. Sambamurthi, was capital expenditure." The assessee was a registered accountant. He was employed by one Mr. Sambamurthi who was also doing similar business at Karaikudi. After some time, the assesse....

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..... The third clause in the letter is very important. It states that no case of the Karaikudi office is to be taken by Sambamurthi without the consent of the assessee and without in office being opened by Sambamurthi at Madras and without repayment of half the fee collected for such case during the period the (consideration for the) goodwill has been paid by the assessee to Sambamurthi. 2. Sambamur....

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....case it was held that the assessee only had the user of the goodwill and did not become the owner and therefore, the share of the profits paid to the widow of the previous owner of the goodwill was in the nature of a revenue expenditure. Tile test to be applied in order to determine whether, in similar circumstances, the expenditure, is a capital expenditure or a revenue expenditure is adverted to....