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TMI Blog1967 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee transferred the said business on the 1st of October, 1943, to Eros Theatre Restaurant Ltd., another private limited company formed with a capital of Rs. 7,91,100 divided into 7,911 shares of Rs. 100 each. 7,901 shares fully paid up were held by the assessee in full satisfaction of the goodwill and other assets and liabilities and the remaining 10 shares were distributed amongst the members of the Cambatta family. The sum of Rs. 7,90,100, which was received by the assessee in the form of the fully paid up shares as consideration for the transfer, was adjusted in the assessee's account books as follows : Rs. Sundry assets 1,28,968 Stock-in-trade 40,000 Book Debts 100 Rs. 1,69,068 Capital Reserve 6,21,032 -------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goodwill, was the value of the lease to the company. Since there were restrictions placed by the landlord on the lessee, this value also could not be a very large amount and could be valued at the most at a figure of Rs.. 2 lakhs. It accordingly took a figure of Rs. 2 lakhs for the value of the goodwill and allowed the said amount in the assessment of the assessee for all the three years. The assessee, it appears, had contended before the Tribunal that it was necessary for the value of the goodwill to be determined as at the beginning of each of the three periods. The Tribunal disregarded the said submission of the assessee on the ground that under the directions of this court what was required to be determined and allowed was the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant, what is catered, how the service is run and what the competition is, contribute also to the goodwill." According to the Supreme Court the Tribunal had not considered the material having regard to all these circumstances and, therefore, a question of law did arise as to whether the goodwill was calculated according to law by the Tribunal. The Supreme Court, therefore, directed this court to frame a suitable question arising out of the order of the Tribunal and ask for a statement of the case from it on the said question and decide the same according to law. In view of the direction of the Supreme Court, this court required the Tribunal to draw up a statement of the case and refer the following two questions to this court " (1) Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid question, therefore, will only have to be considered as confined to the valuation of the goodwill as on 1st October, 1943, and on the 1st of January of the later two years, viz., 1944 and 1945. Now, the value of goodwill is a varying thing and its valuation as arrived at on 1st January, 1943, may not necessarily be the same as on 1st January, 1944, or as on 1st January, 1945. The length of time as also the other circumstances affecting the business have got to be considered and consequently there can be a fluctuation in its value at different stages. If for the purpose of the assessment the valuation of the goodwill is necessary, such valuation has to be made as on the 1st day of the relevant year. In deciding, therefore, what amount fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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