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TMI Blog2012 (4) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial rights associated with - consideration paid is not for the goodwill but it is for the assets, properties and rights of the transferor hence treated as capital receipt - in favour of assessee. Loss on shares disallowed by the assessing officer by invoking the explanation to Section 73 of the Act as the same amounted to speculative loss - Held that :- Section 73 deals with loss and speculative business - If a Company whose gross total income consists mainly of income which is chargeable under the heads "Interest on securities", the "Income from house property", "Capital gains" and "Income from other sources" and if such Company indulges in purchase and sale of shares then by a deeming provision that it is carrying on the speculat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the assessee had incurred a loss of Rs. 8,84,485/- in trading in shares. This was disallowed by the assessing officer by invoking the explanation to Section 73 of the Act as the same amounted to speculative loss. The assessments were completed and an order came to be passed on 27-3-2003. The assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The appellate authority held Rs. 2,02,00,000/- the consideration paid for non-competing fee cannot be treated as a revenue receipt and therefore it cannot be assessed as the income of the assessee under the head "Profits and Gains of Business" as it should be treated as a capital receipt and on that score granted the relief. However, on the other two Counts the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt as held by the Assessing Officers and confirmed by the Appellate Commissioner ? (2) Whether the Tribunal was right in holding that the loss incurred in the sale of shares of Rs. 8,85,485/- cannot be treated as speculative loss in accordance with explanation to section 73 of the Act as held by the Assessing Officer and confirmed by the Appellate Commissioner ?" 4. We have heard the learned counsel appearing for the parties. 5. The assessing authority held that if the entire agreement is read as a whole there is no transfer of Goodwill at all. The acquirer has not acquired the business name/brand name which are the main ingredients of Goodwill. While selling the products that is industrial gases M/s. Proxair the acquirer uses i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of pending contracts of the business and commercial rights associated with or embedded therein. These are the properties owned by AIGL. It is that property which is transferred for consideration of Rs. 2,02,25,000/-. In the aforesaid Clause having set out the particulars of the properties, the rights which are transferred in the end as a residuary, it is stated that all the goodwill pertaining thereon. Now the finding by the Assessing Officer is there is no goodwill. Therefore ' consideration paid is not for the goodwill but it is for the assets, properties and rights of the transferor. Consequently if that is so, for transfer of capital asset no tax is payable. This is what precisely the Tribunal has held. In that view of the matter the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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