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TMI Blog2017 (4) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... nd considered the capital gain to be long term capital gain. 3. While admitting the appeals, this court framed the following substantial question of law:- "Whether the ITAT was justified in holding that the amount of Rs. 1,75,37,275/- paid by the Company to the assessee in terms of the agreement dt. 24.5.1999, would not fall within the meaning of words 'right to manufacture, produce or process any article or thing' but, within the meaning of the words 'right to carry on any business?" 4. Counsel for the appellant Mr. Singhi has taken us to the provision of Section 55 2(a) of the Income Tax, 1961 which reads as under:- "(2) [For the purposes of sections 48 and 49, "cost of acquisition" (a) in relation to a capital asset, being good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) on any distribution of assets on the liquidation of a company, or (d) under a transfer to a revocable or an irrevocable trust, or (e) under any such transfer as is referred to in clause (iV) 2 or clause (V)] 3 or clause (Vi)] 4 or clause (via)] of section 47; (iv) 5 such assessee being a Hindu undivided family, by the mode referred to in sub- section (2) of section 64 at any time after the 31st day of December, 1969 ,] the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be." 6. Therefore, he contended that Tribunal while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred hereinabove, therefore, the issue is required to be answered in favour of the department. 9. He further contended that the circular which is introduced on 18.2.1998 reads as under:- "Cost of acquisition and cost of improvement of certain capital assets 30.1 Up to assessment year 1988-89, the gains arising on the transfer of goodwill were not liable to tax. This was on account of the judicial view approved by the Supreme Court in CIT v B.C. Srinivasa Setty [1981] 128 ITR 294. The rationale of the decision was that goodwill being a self-generated asset and not costing anything in terms of money, the gains could not be computed in accordance with the provisions of the Act. By the Finance Act, 1987, the method of computing the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable under Section 155 2(a) and in that view of the matter, Tribunal has seriously committed an error in holding against the department and in favour of the assessee. 11. Counsel for the respondent has contended in view of the observations made by the Supreme Court in Guffic Chem Private Limited vs. Commissioner of Income Tax, Belgaum and anr. reported in [2011] 332 ITR 602 wherein it has been held as under:- "6. Two questions arose for determination, namely, whether the amounts received by the Appellant for loss of agency was in normal course of business and therefore whether they constituted revenue receipt? The second question which arose before this Court was whether the amount received by the Assessee (compensation) on the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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