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TMI Blog2009 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... w is formulated by the High Court, and the said provision requires that a substantial question of law must be formulated by the High Court. That, in the present case, in absence of any questions of law having been formulated, the respondent is entitled to urge that the questions as proposed in the memorandum of appeal are not substantial questions of law. 2. As against that, the learned counsel for the Appellant Revenue submitted that, in the memorandum of appeal in paragraph no.7, two questions have been proposed by the appellant when the Tax Appeal was filed, and it should mean that at the time of admission, the appeal has been admitted on the questions so proposed and the said questions are deemed to have been formulated by the High Court, hence the appeal should be heard on merits of the questions so formulated. Alternatively, it was submitted that it was open to the Court to formulate any other question which the Court feels is required to be determined. The two proposed questions read as under: "(1) Whether, the Appellate Tribunal is right in law and on facts in holding that the amount of Rs.50 lacs received by the assessee was by way of transfer of its goodwill and not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness as a going concern. A further direction by Commissioner (Appeals) was, as to whether provisions of Section 41 (2) of the Act were applicable to the facts of the case. 6. In the second Assessment order framed by the Assessing Officer on 18/3/1991, the Assessing Officer gave reasons, different from the reasons given in original Assessment order and held that the sum of Rs.50=00 lakhs was received by the Assessee as disguised profits which ought to have been charged on the closing stock and the fixed assets which were valued at book value. 7. When the matter was carried in appeal before Commissioner (Appeals), the addition was confirmed by Commissioner (Appeals) in the second round on altogether different grounds, and the said reasons have been summarized by the Tribunal in its impugned order dated 8/10/1998 in the following manner: (i) Portion of Rs.12 lakhs (profits at 15% of finished goods) was business profit of the appellant trust. Reliance was placed on 189 ITR 285. (ii) Remaining sum of Rs.38 lakhs represented profit earned by the appellant not on account of transfer of any goodwill but on account of transfer of facility which was enjoying for using the brand name o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant piece of evidence, or has considered an irrelevant piece of evidence, or has omitted to consider any evidence at all and recorded a finding which no reasonable person would have arrived at in the facts & circumstances of the case. Inviting attention to the impugned order of Tribunal, it was submitted that the Tribunal's order does not suffer from the vice of perversity. The Tribunal has taken into consideration the facts and evidence on record, including the agreement entered into between the parties, the orders made by, including order of Assessing Officer and Commissioner (Appeals) in both the rounds; and after considering the submissions made by both the sides, the Tribunal has made the order impugned. It was further submitted that the second contention that the Tribunal had not given any reason for disagreeing with the view expressed by Commissioner (Appeals) was also not correct, in as much as, the Tribunal has specifically summarized the findings recorded by Commissioner (Appeals) and thereafter gone on to observe that the sum of Rs.50=00 lakhs was received towards transfer of goodwill only. 9.1. On merits, it was submitted that Revenue was not disputing the receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The fact of the case is not in dispute that the assessee was carrying on business of manufacture and sale of detergent washing power till 31/3/84. In the month of April, 1984 the business was transferred for which an agreement was executed between the parties on 7/4/84. The business was sold as going concern to M/s. Harsiddh Specific Family Trust. The assets of the business was transferred on its book value. The appellant had valued the stock on generally accepted method of valuation of stock which have been followed by the assessee and other assessees of Nirma Group. It was specifically stipulated in the agreement that apart from the price of the assets under book value the purchaser had to pay Rs. 50 lacs for goodwill. Accordingly the aforesaid payment of Rs.50 lakhs was made in respect of the goodwill. The price was fixed by mutual negotiation. The purchaser has debited the amount to its books of accounts which has been accepted by the department. The assessee has filed the deed of transfer along with the paper book which was considered by the A.O. while passing the order." 12. The Tribunal has thereafter referred to the Apex Court decision in the case of Srinivasa Setty (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue any further. 16. In relation to the contention that the burden was not discharged by the Assessee, suffice it to state that the Assessee had made a claim duly supported by the evidence on record in the form of the agreement between he parties, the audited accounts and the figures of net profit earned by the Assessee. To say that there is no evidence as regards mutual negotiations, is an incorrect proposition. There is no prescribed mode & manner of negotiations. Therefore, absence of any correspondence in this regard per se cannot be treated to be an adverse factor. In this context, it is necessary to note that the debit of the amount of Rs.50=00 lakhs by the purchaser of the business in its books of accounts is not doubted and in fact the Tribunal has found that the same has been accepted by the Department as 'purchase price'. Therefore, if the same transaction has been found to be a genuine transaction, treated as such in the hands of the purchaser, there is no reason why a different consideration should prevail in hands of the seller. 17. In fact when one goes to the orders made by the Assessing Officer and Commissioner (Appeals), it becomes clear that the said authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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