COMMISSIONER OF INCOME TAX Vs. SANGHAM ENTERPRISES

JUDGEMENT

(1.) THE following question is referred by the Income-tax Appellate Tribunal, Hyderabad, under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue :

(2.) THE assessee is a registered partnership firm consisting of six partners. One Sri A. Rami Reddy is one of the partners having 2/16ths share in the properties of the firm. THE firm was running two cinema theatres at Vizag. During the relevant assessment year 1983-84, one of the partners, Sri Rami Reddy, retired from the partnership firm on March 20, 1982. He was paid an amount of Rs. 1,00,000 which was standing to his credit. A relinquishment deed was executed. THE relevant para in the relinquishment deed reads as follows :

(3.) THE reference by the Tribunal to the observation made in Puran Das's case [1988] 169 ITR 480 (AP), is misconceived. THE learned judges held that the acquisition of the goodwill is a revenue asset. In spite of service of notice, none appeared for the assessee.