TMI Blog2000 (12) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case, the Tribunal was justified in holding that the payment of Rs. 35,000 in respect of the assessment year 1976-77 represented capital expenditure and not payment as hire charges? 2. Whether, on the facts and circumstances of the case, the payment of Rs. 35,000 made by the assessee to the family of the deceased was an admissible deduction in computing the income of the assessee for the assessment year 1976-77?" I.T.R. No. 325 of 1980: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the payment of Rs. 16,521 in respect of the assessment year 1977-78 represented capital expenditure and not payment as hire charges? 2. Whether, on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. of the net profits. After that, the goodwill of the business was to become the sole property of Shri J. M. Mehra unless any of the sons of the deceased Kala Ram Khanna qualified as a chartered accountant during the period of 12 years as noted above and joined Shri J. M. Mehra as partner. Till March 31, 1973, the net profits of the firm by way of hire charges for the use of half share of the goodwill was claimed as revenue expenditure. The same was allowed as claimed. Till the end of March, 1973, none of the sons of the deceased Kala Ram Khanna had qualified as chartered accountant. Therefore, it was considered necessary to modify the existing arrangement with regard to the deceased's share of goodwill. On April 3, 1973, a fresh agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goodwill and the disallowance was confirmed. The assessee took the matter in further appeal before the Tribunal. The disallowance of the aforesaid sums of Rs. 33,111 and Rs. 15,367 for the two assessment years was confirmed by the Tribunal. During the assessment year 1976-77, Shri J. M. Mehra entered into an agreement with Mr. Vinay Mehra and Shri J.P. Goyal for carrying on profession as Mehra Khanna and Co. the present assessee. It paid Rs. 35,000 in respect of the goodwill to the legal heirs of the deceased as it had done in the preceding year and claimed the same as revenue expenditure. The Income-tax Officer disallowed the claim. It was ultimately affirmed by the Tribunal. So far as 1977-78 is concerned, the difference between the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th. Its benefit in the business varies with the nature of the business and also from one business to another. This position was succinctly stated by the apex court in CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294. The goodwill of a business means every affirmative advantage that has been acquired in carrying on the business, whether connected with the premises of the business or its name or style and everything connected with or carrying with it the benefit of the business. (see Cruttwell v. Lye [1980] 17 Ves. 335). Goodwill would-include the probability that the old customers will resort to the old place. But generally speaking it means much more than that. Often it happens that goodwill is the very substance and life of the business, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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