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2016 (7) TMI 975 - HC - Income TaxGoodwill arising on succession - capital balance accounted as goodwill - capital gain computation - transfer - interpretation of Section 47 (xiv) - AO found that the goodwill was never created in the books of the proprietary concern and therefore it never became an asset of the sole proprietary concern which was taken over on such succession also confirmed by CIT-A and ITAT - Held that:- after considering that the assessee's capital account in the OPM had the credit balance of ₹ 1,16,05,939/only and the assessee has been allotted fully paid up share capital worth ₹ 3,35,90,640/, we are of the considered opinion that the assessee has got the additional share capital allotment of ₹ 2,29,84,701/without bringing anything to the assignee. Therefore, the prerequisite laid down in section 47(xiv) has not been complied with. It is also pertinent to mention that the cases laws relied on by Ld.AR to justify the case of the assessee are distinguishable on facts as in the cases relied by the Ld.AR, a proper valuation of good will has been done prior to the transfer of assets. In view of that matter, we do not find any justifiable reason to interfere with the order of the Ld.CIT(A) confirming the addition/disallowance made by the AO on this count. We do not think that the Tribunal's view and in the backdrop of the peculiar facts can be termed as perverse or vitiated by any error of law apparent on the face of the record. We do not think any question, much less of interpretation of Section 47(xiv) arises in this appeal. - Decided against assessee
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