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TMI Blog1983 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ll. The assessee also contended that since certain portions of assets transferred belong to the partners of the firm in their individual capacity, the compensation money has to be apportioned as between the various assets which were the subject-matter of the bargain. The Appellate Assistant Commissioner held that the decision in Rathnam Nadar v. CIT [1969] 71 ITR 433 would apply to the facts of the case and, therefore, the goodwill should be taken as a self-generating asset and, therefore, no capital gain will arise out of the transfer of that asset. As regards the other question relating to the ownership of various items of properties, the Appellate Assistant Commissioner held that since no claim was made at any stage that some of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that capital gain cannot be charged on the cost of the goodwill. On the question raised by the assessee, as to the apportionment of the sale price towards various assets on the ground that such apportionment is necessary, as some of the assets belong to the partners in their individual capacity, the Tribunal felt that if it all, the assets transferred do not belong to the firm and some of the assets belong to the partners of the firm in their individual capacity, then naturally the sale price should be apportioned as between the various assets for the purpose of determining the capital gain in the hands of the firm and, therefore, remitted the matter to the Income-tax Officer to find out whether any of the assets transferred belonged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment especially when it was brought out that the assessee-firm had treated the assets as belonging to the firm and also claimed depreciation thereon ? " So far as the first question is concerned, the Tribunal proceeded on the basis that the assessee did not acquire the goodwill from a third party but it is a self-generating asset in its hands and, therefore, the decision in Rathnam Nadar v. CIT [1969] 71 ITR 433 (Mad) would apply. It is no doubt true, that subsequent to the decision of the Tribunal, the Revenue has filed a miscellaneous application for rectification of the order of the Tribunal on the ground that the Tribunal has not given any finding on the question, as to whether the assessee had purchased the goodwill from a third p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is no (sic) the first question. So far as second and third questions are concerned, as already stated, the Tribunal has remitted the matter to the Income-tax Officer to determine the ownership of the assets. It cannot be disputed that some of the assets are owned by partners in their individual capacity and, therefore, those cannot be taken to be the assets of the firm. The contention of the Revenue is that all the assets belong to the firm, since depreciation has been claimed on those assets for earlier years and it is not open to the assessee now to contend that some of the assets which had been transferred belong to the partners individually. All these contentions have been urged before the Income-tax Officer, who has been di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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