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2002 (9) TMI 46 - HC - Income TaxConversion of Proprietary Business into Firm – capital gains - "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming that the entire transaction by the petitioner is a sham or device? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the device encompasses the goodwill amounting to Rs. 2,72,500 also?" - The first question referred to us is, therefore, required to be and is answered against the assessee, by holding that the entire transaction was a device adopted by the assessee to avoid the payment of capital gains tax and that the assessee is liable for the payment of that tax on the value of the proprietary business made over to the firm. - So far as the second question is concerned the. Assessing Officer had not brought the goodwill to tax as it was a self-generated asset and during this assessment year the statute did not provide for the levy of capital gains tax on that goodwill. That question is answered in favour of the assessee and against the Revenue.
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