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TMI Blog1981 (1) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... s to enable us come to a conclusion that such salary is reasonable with reference to the turnover or such other factors. Under the circumstances, we are unable to interfere with the disallowance for either year. The appeal on this point fails. 3. The next ground relates to the disallowance of 1/4th of the conveyance expenses and 1/4th of the quarterly taxes paid in respect of such conveyance as personal. The disallowances came to Rs. 15,800 and Rs. 1,116 for asst yr. 1972-73 and 11,952 and Rs. 1,829 for asst. yr. 1973-74. It was found that there were other travelling expenses also. The first appellate authority found that the assessee was not able to show that all the vehicles in respect of which the expenses were claimed were used for business. It was also pointed out that a similar disallowance was upheld for asst. yr. 1971-72 by this Tribunal in ITA No. 150(Mds)/75-76 dt. 27th Nov., 1976. Since there is no positive material as to why a different view should be taken for this year, we have to reject the appeal in respect of these disallowances also. The appeal on this point also fails. 4. The next common ground relates to the addition of Rs. 1,10,000 and Rs. 54,000 in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst three actual years. He claimed that the assessee has been asserting that the construction had started in 1971 itself. He had difficulty in producing the records because the construction was done by the assessee during his life time and the legal representative was unable to get all the proof even as to the source because the deceased was managing his own affairs till his death. The legal representative was not even aware whether the assessee had any explanation from the taxed source for the construction. Only to purchase peace, he accounted the cost of construction. He, however, claimed that his client is prepared to give up the claim for acceptance of Rs. 90,000 as cost of construction, if his reasonable claim for spreading over the outlay for three years is accepted. The ld. Deptl. Rep relied upon the orders of the authorities below. She claimed that the assessee had not produced any proof to the actual period of construction. 5. We have carefully considered the facts and circumstances of the case. We do find that the valuation report furnished on behalf on the assessee shows that the approved valuer had inspected the property on 9th Sept., 1971 when it was nearly 3/4th comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving 85 acres of Nanja and Punja lands. The ITO however, was unable to accept the explanation as no details of sales of agricultural produce were available. He was of the view that such large amounts could be easily proved with reference to details and bills. Since an amount of Rs. 15,000 out of Rs. 34,000 credited last yeas was treated as unexplained, he made a similar disallowance of Rs. 15,000 out of Rs. 50,000 after giving credit for all possible agricultural income. The first appellate authority found that the credit given by the ITO was reasonable and that the addition deserved confirmation. The learned counsel for the appellant claimed that no material had been brought on record to controvert the Karnam's certificates. It was also pointed out that the same AAC while dealing with the appeal for asst yr. 1973-74 pointed out that an amount of Rs. 43,230 was accepted as reasonable agricultural income for asst. yr. 1970-71 by this Tribunal. It is therefore contended that an amount of Rs. 50,000 cannot be considered high. The ld. Deptl. Rep. on the other hand claimed that 80 acres were all Nanja lands. There was only a credit of Rs. 10,000 for the immediately succeeding year and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kareem and S.A. Aleem in the name of M/s Syed Habibullah was entered into under a partnership deed dt. 30th Nov., 1957. There was a dispute between the assessee Shri S.A. Rahim and the two others, resulting in the dispute being referred to arbitration as to the division of the partnership assets. The arbitrators were three persons, who give a unanimous award on 30th April, 1968 whereby the properties were divided. The parties jointly approached Registrar of Trade Marks, Bombay for registration of the Trade Marks consequent on their division by mutual consent of the areas of the trade of business of M/s Syed Habibullah with regard to 'Taj Mahal' and 'Kalasam' Beedies. The Arbitrators directed that the parties should cooperate with each other for getting such trade mark registered in the manner agreed to between them. It was agreed that the assessee should pay the other two co-partners a sum of Rs. 1,36,000 reckoned on the basis of the goodwill ascertained with reference to the past profits relatable to the territorial areas allotted to the respective erstwhile partners. It was noted that 'Taj Mahal' in respect of certain specified are as had come to the firm from the earlier firm of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oom hours' from another manufacturer. The facts, according to her were not comparable at all. She pointed out that the payment was to enable the assessee to do business by use of the trade marks which belonged to the firm in the area of Andhra Region. This payment was part of the adjustment of rights between partners and was on capital account. It related to business structure. She pointed out to the various passages in the arbitration award which specifically stipulated that the main dispute was regarding the valuation of rights to trade in the name of 'Taj Mahal' beedies on the basis of territories and the payment to be adjusted between the parties after allotment of areas between them. This is a payment for purchase of goodwill because the preamble of duty of the arbitrators to find out a solution "with regard to goodwill pursuant to the suggested division". There are also other passages in the award which describes the payment as "the compensation for goodwill". The working for arriving at the amount also shows that it was pure and simple goodwill. She pointed out that the assessee paid a lumpsum amount as the payment for goodwill. The right had become an absolute right thereaf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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