COMMISSIONER OF INCOME-TAX Vs. MAHAJAN INTERNATIONAL

JUDGEMENT

(1.) THE Commissioner of Income-tax, Rohtak, seeks in this petition under Section 256 (2) of the Income-tax Act, 1961, the reference of two questions. These are :

(2.) THE matter here pertains to the assessment year 1977-78.

(3.) THE facts relevant to the issues raised are that, on December 31, 1976, the assessee-firm was sold as a going concern along with all its assets and liabilities to Messrs. Panipat Food Limited. The total sale consideration was Rs. 20,21,767. 68 out of which a sum of Rs. 4,50,000 was said to be the value of the goodwill. The Inspecting Assistant Commissioner, by his order of February 6, 1981, by invoking the provisions of Section 52 (2) of the Income-tax Act, 1961, determined the fair market value of the assessee-firm sold under the agreement of December 31, 1976, to be Rs. 69,27,000. As a consequence, he proceeded to work out, on that basis, capital gains to be Rs. 32,10,140 which was then included in the total income of the assessee-firm.