N A MODY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THREE questions arise for consideration in this reference at the instance of the assessee under s. 256(1) of the IT Act, 1961. They read thus :

(2.) THE assessment year concerned is 1962 63, the previous year having ended on March 31, 1962. The assessee is an advocate and solicitor of this Court. Under the terms of a partnership deed dated January 3, 1957, he was made a partner of the solicitor firm of Little and Co. For acquiring an interest in the assets, goodwill and profits of the firm, he paid an aggregate sum of Rs. 40,680.

(3.) IN the return filed by the assessee for the assessment year concerned, the assessee stated that the amounts of Rs. 17,975 and Rs. 10,150 received by him under cls. 8 and 12 of the consent terms were not liable to tax. The ITO rejected the assessee's submission and held that the sum of Rs. 37,820 under cl. 8 was chargeable to capital gains tax and the sum of Rs. 40,600 under cl. 12 was liable to tax as a revenue receipts. On appeal, the AAC held that the amount taxable under cl. 8 as capital gains was Rs. 31,220, that is, Rs. 71,900 minus Rs. 40,680, and that the amount of Rs. 40,600 under cl. 12 of the consent terms should be taxed, but spread out between the asst. yrs. 1962 63 and 1965 66, as a revenue receipts The assessee appealed to the Tribunal which upheld the AAC's order. The questions posed to us arise out of the Tribunal's order.