COMMISSIONER OF INCOME TAX Vs. RAJANI MOTORS

JUDGEMENT

(1.) A reference under S. 256(1) of the INCOME TAX ACT, 1961 (hereinafter referred to s the Act) has been made and a statement of the case has been submitted by the Tribunal, Patna Bench, B Patna by referring the following question to be answered b y this Court ;

(2.) THE relevant short facts can be narrated from the statement of the case itself. The order under reference relate to the asst. year 1964 -65. The assessee firm transferred its business to private limited company Rajani Motors (P) Ltd. A sum of Rs. 80,000 was paid as the price of the goodwill to the asessee by the said company. The ITO took the entire price of goodwill to the company as capital gains arising out of the transfer of goodwill to the company and included it in the total income of the assessee under S. 45 of the Act, A copy of the order of the ITO has been marked Annexure A to the Statement of the Case.

(3.) ON a further appeal to the Tribunal the Tribunal upheld the finding of the AAC that the value of the goodwill in the instant case was not tenable.