TMI Blog2009 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... cant. Mr. Suresh Kumar for the respondent. JUDGMENT The judgment of the court was delivered by R.S. Mohite, J - The questions referred by the Income-tax Appellate Tribunal under Section 256(1) are as under:- (1) Whether, on the facts and in the circumstances of the case, the Income-Tax Appellate Tribunal erred in law in holding that the sum of Rs.8,80,518/-, Rs.3,31,144/- being part of the compensation and fees payable to M/s. Dorr-Oliver Inc. of U.S.A. under the agreement of 1 st January, 1959 was not admissible as deduction in the computation of the assessee's total income? (2) Whether, on the facts and in the circumstances of the case the Tribunal ought to have held that the entire amount of Rs.19,21,847/- and Rs.7,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to terminal allowance of Rs.7,22,065/- under sec.32(1)(iii) on the take over of its business as a going concern by M/s. Hindustan Dorr-Oliver Ltd.? 2. Of these questions, question nos.1, 2 3 are referred at the instance of the assessee whereas question nos.4, 5, 6 7 are referred at the instance of the department. 3. Our answers to these questions are as under:- As regards question nos.1 2 are concerned, Counsel appearing for the parties are agreeable that the questions have been answered by this Court in the case of M/s.Dorr Oliver India Ltd., Vs. CIT reported in 234 ITR 723 in respect of Assessment year 1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question no.6 is concerned, Counsel for the parties submit that the question is answered by this Court in the case of CIT Vs. Hico Products Pvt.Ltd., (I) reported in 201 ITR 567. The question is therefore, answered in the affirmative and in favour of the assessee to the extent that disallowance is permissible under Section 40(c). 8. In so far as question no.7 is concerned, it would be necessary to mention a few facts which are germane for the answering of the said question. In this case the assessee Dorr Oliver India Ltd., wanted to assign its business to Hindustan Dorr Oliver Ltd., as a going concern at the market value. Government of India however, by its letter dated 30.11.1974 addressed to the assessee, informed the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer was wrong in holding that a capital asset of the business had been transferred as a going concern and consequently he directed the assessing officer to allow the claim of the assessee after due verification. 9. The department preferred an appeal before the Tribunal and the Tribunal held that the loss has to be allowed as a terminal loss under Section 32(1) (iii) because the consideration was relatable to the value of the asset transferred. Tribunal thus confirmed the decision of the CIT (Appeals). The department filed an application for reference and this question was thus referred. 10. We find from the record that this is a case where there was a specific stipulation of the Government of India to effect the transfer at book v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e excess over the written down value as profits under the second proviso of section 10(2)(vii) of the Income-tax Act 1922. We find from the order of the Tribunal that the Tribunal has relied upon this judgment in the case of Pandit Lakshmikant Jha Vs. CIT reported in 75 ITR 790, SC, (supra). The finding of the Tribunal is that the present case is covered by the ratio laid down by the Supreme Court in the aforesaid judgment. We find that the facts of the present case are not similar to the facts in Pandit Laxmikant Jha's case and it will be incorrect to say that the Supreme Court judgment covers the issue as raised in the present case. The question before the Apex Court considered the assessment of profit under Section 10(2) (vi) 1972 (s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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