TMI Blog1978 (8) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1965-66. The assessee is an individual. He was the owner of a business and sold it to a company in the relevant previous year. He also sold the goodwill of the said business to that company for Rs. 60,000. The ITO brought Rs. 60,000 to tax under the head "capital gains". The appeals filed by the assessee were dismissed by both the appellate authorities. The assessee then made an application before the Tribunal under s. 254(2) of the I.T. Act, 1961, without asking for setting aside of the appellate order of the Tribunal. It may be now noted here that two grounds were taken before the Tribunal in that application but only one ground has been argued before us which was argued before the Tribunal on behalf of the assessee. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his contentions that the goodwill of the business is a capital asset and any profit or gain arising from its sale is taxable under the head "Capital gains". Mr. Sengupta also argues that in any event two conceivable opinions being possible as to whether the goodwill of the business is a capital asset for the purposes of capital gains, it cannot be said that there is any mistake apparent from the record in the order of the Tribunal and, therefore, it was not a rectifiable mistake under s. 254(2) of the Act. Before dealing with the aforesaid arguments we would like to dispose of the two cases cited by Mr. Poddar in support of his another argument that the Tribunal should have followed the case of Chunilal Prabhudas Co. [1970] 76 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was no mistake apparent from the record which could be rectified by the ITO under s. 154 of the Act. The Madras High Court, on a reference, disagreed with the Tribunal in view of a decision of that court in which it was held that the wealth-tax paid by a company was not an allowable expenditure and at page 825 of the report observed as follows : "We are not referring to the subsequent decisions on this question and the retrospective amendment of the law in this behalf because at the time when the Income-tax Officer took proceedings under section 154 this was the only binding decision in existence and, therefore, it was not merely the right but the duty of the Income-tax Officer to give effect to the law as declared by this court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a rectification application should only look at the decisions of a particular High Court under whose advisory jurisdiction it acts in order to find out whether that High Court has taken different views on the question of law involved before it. They must consider the decisions of all the High Courts and if there is a divergence of judicial opinion on the question of law or two conceivable opinions are possible on it, they must hold that the mistake is not apparent from the records. The contention of Mr. Poddar is, therefore, rejected. Now, as to the main argument of Mr. Poddar, namely, that we should follow the case of Chunilal Prabhudas Co. [1970] 76 ITR 566 (Cal). In the case of Devidas Vithaldas Co. [1972] 84 ITR 277 (SC), at p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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