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2017 (2) TMI 860 - BOMBAY HIGH COURTReview petition - Internally Generated Goodwill - errors apparent on the face of the record for this court did not refer, in addition to clause (xiv) of section 47, two important sections section 55(2) as also another provision on which he placed reliance, namely, sections 48 and 49 - Held that:- Once M/s. Overseas Plastic Moulders was converted into a private limited company in the name and style as M/s. Overseas Plastic Moulders India Private Limited, the business of the appellant was transferred. The appellant received the entire consideration of transfer by way of fully paid up shares of the private limited company. No monetary consideration for transfer of this proprietary business with goodwill was received. That is why section 47(xiv) enabled the appellant to claim a benefit of the goodwill of ₹ 2,29,89,701/-, which was generated as a result of the proprietary business carried out was the plea raised. It is in relation to these facts that the tribunal concurred with the Commissioner of Income Tax (Appeals). It has also referred to the deed of assignment dated 17th September, 2008. It also perused the first and the second Schedule to the agreement, which set out the details and particulars of the immovable and movable assets, to which the assignor is entitled. That did not contain any details as to the valuation of goodwill while arriving at a total value of ₹ 3,35,90,640/-, for which the allotment of 3359064 shares of ₹ 10/- each in the share capital of the assignee was obtained. The general wording in the recitals may cover goodwill, but the assignment deed did not evidence that a goodwill valued at certain figure is transferred. The alleged goodwill was not created in the books of the propriety concern is thus one of the findings. The tribunal holds that the allotment of shares exceeding ₹ 1,16,05,939/- is in the form of excess asset over and above the assets and liabilities of the assignor. That is why it referred to the figures in the books of Account and rendered an opinion that the assessee derived an additional share capital allotment of ₹ 2,29,84,701/- without bringing in anything to the assignee. It is in these circumstances that the pre-requisite in section 47 has not been complied with. The tribunal distinguished the judgments relied upon by holding that in those cases, facts denote that a proper valuation of the goodwill has been done prior to the transfer of the assets. We do not think that by going behind the order again, we can test whether other provisions and the pre-requisite necessary to attract them are present and therefore we must rely on the Hon'ble Supreme Court judgment in the case of Commissioner of Income Tax vs. Smifs Securities Ltd. (2012 (8) TMI 713 - SUPREME COURT) and the accounting standards. This is a course impermissible in review jurisdiction. We find no merit in the review petition and it is dismissed.
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