1989 (9) TMI 88

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.... of law in this reference is "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 61,000 received as consideration for goodwill by the assessee should not be treated as capital gains for purposes of section 45 of the Income-tax Act, 1961 ?" According to Dr. Balasubramanian, learned counsel for the Department, the question is n....

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....uary 21, 1971, for Rs. 61,000, Dr. Balasubramanian contended that the surplus arising on the sale of the goodwill was taxable as income under the head "Capital gains". The facts stated in the statement of the case are: "The reference relates to the assessment year 1972-73, the previous year for which was the financial year ending on March 31, 1972. The assessee and his brother, Shri Damodar ....

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....r partner. Clause 5 of the agreement stated that goodwill and the name of Shah Damodar Dharshi and Bros. was allotted and given to the assessee's brother, Shri Damodardas, who could conduct the business in that or allied name. Clause 18 of the deed mentioned that for the purpose of stamp duty, the value of goodwill was to be fixed at Rs. 3,000." It is evident that on the dissolution of the part....

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....licable. The facts, on the other hand, clearly show that the assessee and his brother were carrying on business since 1943 in partnership. The firm was dissolved in the year 1965. There is no whisper that the partnership bad purchased the goodwill. The deed of dissolution clearly provided that the goodwill of the partnership remained with the assessee's brother the value of which was taken at Rs. ....