9911796707
TMI Blog1976 (4) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... al was right in holding that only a sum of Rs. 10,823 could be brought to tax as capital gains in the assessee s case ?" (iii) "Whether, on the facts and in the circumstances of the case, the Tribunal was right in determining and had valid materials to determine the cost of acquisition of the business at Rs. 58,287 ?" 2. The assessee is a private limited company running a fleet of buses. Its previous year ended on 31st May, 1965 for the asst. yr. 1966-67 with which this application is concerned. During the accounting year, the company transferred its buses to a firm consisting of the same persons as the shareholders of the company as partners in the firm. The ITO traced the history of the company. Originally the business was run by Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100 was treated as capital gains under s.52(2). 3. The assessee appealed to the AAC. The AAC held that the route permits are in the nature of goodwill. He applied the decision in the case of Ratnam Nadar, reported in 71 ITR 433 and held that no capital gains can be brought to tax on the transfer of the goodwill. 4. The Revenue appealed to the Tribunal. It was contended that the subject matter of the transfer was the route permits, though described as goodwill. The real nature of the asset was route permit and according the decision in Ratnam Nadar s case, reported in 71 ITR 433 will not apply. On the other hand, the learned counsel for the assessee relied on the order of the AAC. He pointed out that when individual Kulandaivelu Konar tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en for purposes of computing the capital gains. The Tribunal held as a matter of fact that what was transferred was the business as a whole. The only question left was to value the business when it became the business of the company. Whether as route value or as goodwill it is not an item of tangible asset and did not form part of the book value. Such an item which did not appear in the books had to be valued for purposes of capital gains. When the business became the business of the company, it was acquired at the book value and the Tribunal took the value of this intangible asset at the value placed by the Department in the earlier proceedings as the cost of the company. This is a finding of fact based on Revenue s valuation and does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
