TMI Blog1973 (7) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxable as capital gains ? " The assessee is a private limited company owning a tile factory in Mangalore. By a resolution dated July 16, 1972, the assessee decided to sell its business as a going concern to a firm and its assets and liabilities consequently were transferred to a firm consisting of four partners. The same partners were the directors and shareholders in the company also. Their shares in the firm were in proportion to the shares they held in the company. The transfer resulted in a profit of Rs. 2,34,362 which was taken to the profit and loss account. There was also a balancing surplus of Rs. 16,047. The assessee filed a return in respect of the assessment year 1964-65 for which the relevant accounting year is the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner with a direction to allow both the parties to adduce such material as are necessary to decide the question whether the sum of Rs. 2,34,362 represented the value of the goodwill and whether the said amount could be chargeable to tax in the hands of the assessee as capital gains. Aggrieved by the said order of the Tribunal, the department sought the reference to this court. It was not urged before us by the learned counsel for the department, Sri Balakrishna, that there was no material before the Tribunal to allow the additional ground to be raised. His contention was that the Tribunal has no jurisdiction to allow the assessee to raise a new ground not agitated before the Appellate Assistant Commissioner. To support his contention, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal is competent to pass such orders on appeal 'as it thinks fit'. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions, whether of law or of facts, which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in respect of a contention raised by the assessee, grant of relief to him on another ground is justified it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him." In view of the clear statement of law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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