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TMI Blog1981 (9) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... nd fruits. In the assessment dt. 7th February, 1978 in respect of the principal value of the estate left by the deceased his share in the goodwill of the aforesaid firm was determined at Rs. 98,908 The goodwill of the firm was worked out on the basis of three years purchase after allowing interest at 12% on the capital and salary to the partners at Rs. 1,500 for each partner. It may be stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is death the business had shown a downward trend because against the assessed income at Rs. 1.25 lakhs for the asst. yr. 1976-77 the profit for the asst. yr. 1977-78 come down to Rs. 48,218. The Zonal Appellate Controller considered these arguments and directed the Asstt. CED to work out the value of adopting two years purchase after allowing interest at 12% and salary to partners at Rs. 1,500 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Madras High Court judgment referred to above, the business was hotel business and assessment of goodwill of that business at 1 1/2 years purchases was upheld. He also pointed out that the High Court itself had observed that a rough and ready method of valuing the goodwill of a business is to take it as being worth one to three years purchase of the annual profits, such or of its being based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in mica mining and sale of mica. 4. We have carefully considered the rival submissions. We enquired from the ld. counsel for the assessee as to from which year the deceased was a partner in the aforesaid firm and we were told that he was a partner in the aforesaid firm right from its inception sometime in the year 1969-70. The only point for consideration before us is whether two years pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goodwill of the deceased by applying the multiple of 1 times purchase of the annual profits after allowing deductions on account of interest and salary of the partners. It is true that in the case of CED vs. Valluru Venkateswara Rao (1979) 12 CTR (AP) 247 the share of goodwill of the deceased was determined on the basis of one year s purchase of average profits but business in that case was o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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