COMMISSIONER OF INCOME TAX Vs. K RAFFIUDDIN

JUDGEMENT

(1.) AT the instance of the Revenue, the following question of law is referred for the opinion of this court :

(2.) THE assessee preferred an appeal before the Commissioner of Income-tax (Appeals) stating that there was a transfer within the meaning of Section 2(47) of the Act with regard to the goodwill acquired by him at a cost of Rs. 2,00,000, that the cost of Rs. 2,00,000 towards goodwill was extinguished in view of the transfer referred to above and, therefore, the assessee is entitled to set-off against the capital gains with regard to the loss of Rs. 2,00,000. THE abovesaid contention of the assessee was accepted by the Commissioner of Income-tax (Appeals) and deduction was allowed. Aggrieved by the order of the Commissioner of Income-tax, the Revenue preferred an appeal before the Income-tax Appellate Tribunal, Bench-A, Madras.

(3.) LEARNED counsel for the Revenue would contend that since the goodwill was kept out of the sale transaction thereby retaining the same by the assessee, the extinguishment of such right is an extinguishment as a result of the unilateral act of the assessee and since the abovesaid transaction was not involved with more than one party, apart from non-passing of consideration therefor, the assessee is not entitled to claim deduction for goodwill under Section 2(47) of the Act read with Section 45 of the Act.