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TMI Blog1974 (7) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... tal consideration of Rs. 1,40,000. In the original assessment proceedings for the assessment year 1958-59, the Income-tax Officer considered that the sale consideration included the value of goodwill Accordingly, he broke up the sale consideration of Rs. 1,40,000, into consideration for sale of buses and value of goodwill and fixed the value of the goodwill at Rs. 84,000 and the sale of buses at Rs. 56,000. The difference of Rs. 4,058 between the sale value of the buses as thus apportioned and the written down value was assessed to tax as profit under section 10(2)(vii) of the Income-tax Act, 1922 (hereinafter called " the Act "). The value, of goodwill of Rs. 84,000 was assessed as capital gain under section 12B of the Act. The a filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fair market value of the buses. This finding of the Tribunal was treated as an information coming into the possession of the Income-tax Officer and, accordingly, the Income-tax Officer invoked his powers under section 34(1)(b) and issued a notice to the assessee proposing to assess that portion of the difference between the sale value of Rs. 1,40,000 and the written down value of Rs. 51,942 as would fall under section 10(2)(vii) as the income of the assessee. The assessee filed a revised rate as per the original assessment order excluding the capital gains. After hearing the assessee's representative, the Income-tax Officer passed an order dated March 8, 1963, holding that the assessee had sold his buses for Rs. 1,40,000, the original co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the matter the assessee did not make a capital gain of Rs. 84,000 on the sale of buses. The absence of any specific finding by the Tribunal and the mere disposal of the appeal before them in favour of the assessee cannot constitute ' information ' within the meaning of section 34(1)(b) of the Income-tax Act, 1922. All the facts available to the Tribunal were before the Income-tax Officer also at the time of the original assessment and, in our opinion, there is no fresh ' information ' which can be said to have come to light as a result of the Tribunal's order so as to vest jurisdiction in the Income-tax Officer for the purpose of reassessment under section 34(1)(b) of the Income-tax Act, 1922 ... " In this view, the Tribunal hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be interpreted as meaning that there was no sale of goodwill, but it cannot be stated that the Tribunal has given a finding that the entire sum of Rs. 1,40,000 or any portion of the same was the fair market value of the buses themselves. In this connection, the learned counsel pointed out that the buses as such could not have been sold for such a huge consideration but for the fact that it has got route permit and for the purpose of ascertaining the income chargeable to tax under section 10(2)(vii), the value of the route permit could not be considered. In other words, the argument of the learned counsel is that the Income-tax Officer, in the original assessment, fixed the value of the buses at Rs. 56,000 and considered the remaining R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all either on January 1, 1954, or on the date of sale, much less its value. But what the Tribunal stated in the next paragraph is the only relevant thing for the purpose of deciding the question at issue. In that paragraph, after referring to the circumstances in which the buses came to be sold, the Tribunal stated that those circumstances would indicate that the assessee was not in a bargaining position as to compel payment for an intangible asset over and above the fair market value of the buses themselves. We are of the view that, on a reasonable interpretation, this might be considered as a finding that there was no sale of goodwill and that the entire price realised by the assessee is the fair market value of the buses themselves. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in fact they were condemned in two or three years after the sale and that only because of the value of the route permit the same has realised so much as consideration. In this connection, he also referred to the decision of this court in Y. Vijayaranga Mudaliar v. Commissioner of Income-tax wherein this court had observed that the buses have little, value shorn of their permits to ply on particular routes and that in case of sale of buses, it is an open secret that the consideration paid by the purchaser of the vehicles is only commensurate with their earning capacity which is intimately connected with the routes on which they operate. The learned judges also observed therein that we can almost take judicial notice of the fact that whenev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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