9911796707
TMI Blog1967 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... re held by the assessee in full satisfaction of the goodwill and other assets and liabilities and the remaining 10 shares were distributed amongst the members of the Cambatta family. The sum of Rs. 7,90,100, which was received by the assessee in the form of the fully paid up shares as consideration for the transfer, was adjusted in the assessee's account books as follows : Rs. Sundry assets 1,28,968 Stock-in-trade 40,000 Book Debts 100 Rs. 1,69,068 Capital Reserve 6,21,032 ---------------------- 7,90,100 ---------------------- In the books of the transferee, viz., the Eros Theatre and Restaurant Ltd., the purchase was recorded as follows : Rs. Goodwill 5,00,000 Sundry assets 2,50,000 Stock-in-trade 40,000 Book debts 100 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2 lakhs for the value of the goodwill and allowed the said amount in the assessment of the assessee for all the three years. The assessee, it appears, had contended before the Tribunal that it was necessary for the value of the goodwill to be determined as at the beginning of each of the three periods. The Tribunal disregarded the said submission of the assessee on the ground that under the directions of this court what was required to be determined and allowed was the value at the date of the transfer. From the said decision and order of the Tribunal the assessee applied for a reference to this court under section 66(1) but the said application of the assessee was rejected. It then applied to this court under section 66(2) but that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d arise as to whether the goodwill was calculated according to law by the Tribunal. The Supreme Court, therefore, directed this court to frame a suitable question arising out of the order of the Tribunal and ask for a statement of the case from it on the said question and decide the same according to law. In view of the direction of the Supreme Court, this court required the Tribunal to draw up a statement of the case and refer the following two questions to this court " (1) Whether the goodwill of the Eros Theatre and Restaurant Limited was calculated according to law ? and (2) Whether the Tribunal erred in not valuing the goodwill of the said business separately as on the first day of January, 1943, 1st day of October, 1943, 1st day of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived at on 1st January, 1943, may not necessarily be the same as on 1st January, 1944, or as on 1st January, 1945. The length of time as also the other circumstances affecting the business have got to be considered and consequently there can be a fluctuation in its value at different stages. If for the purpose of the assessment the valuation of the goodwill is necessary, such valuation has to be made as on the 1st day of the relevant year. In deciding, therefore, what amount for the value of the goodwill could be allowed to the assessee for each of the years, it would be necessary to ascertain the value of the goodwill as on the 1st day of each of the relevant years. It is no doubt true that once the value is determined as on 1st October, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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