TMI Blog1994 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... rson. Relevant documents and papers were filed before us. It was stated that due to the old age, the assessee decided to transfer his practice to one M/s. C.R. Bhansali Associates for a consideration of Rs. 2,01,000 with effect from 1-2-1986. The assessee surrendered the certificate of practice. As per letter issued by the Institute of Chartered Accountants of India dated 14th April, 1987, the certificate of practice was cancelled with effect from 1st April, 1987. The assessee issued a letter dated 1-2-1986 to his clients. This letter is reproduced here as under: "We have pleasure in stating that we have transferred our entire practice to M/s. C.R. Bhansali Associates, Chartered Accountants, with effect from 1-2-1986 and they will now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee received was consideration for introducing the clients with a new firm. It was therefore a revenue receipt, hence exigible to tax. 5. We have heard the rival submissions in the light of material placed before us and precedents relied upon. It was submitted that the assessee surrendered his certificate of practice; due to old age. It is abundantly clear from the perusal of letter dated 1-2-1986 that the practice of the assessee was transferred to M/s. C.R. Bhansali Associates and his clients were advised to approach the said firm. The amounts which the assessee received was not just to introduce his clients to the new firm, but it was the consideration received on account of the reputation which facilitated the transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge or relinquishment of asset, or the extinguishment of any rights therein etc. The word 'property' should be given a liberal and wide connotation so as to extend those well recognised types of interest which have the insignia characteristic of proprietary right. In tax jurisprudence goodwill is considered as capital asset. Likewise, such other rights which generate in course of the profession and buttress the cause of profession also comes within the same category. 8. If an assessee sells his practice alongwith the name, it is treated as transfer of goodwill. In the instant case, the assessee transferred his practice. The transferee was a Chartered Accountant. He was carrying on his practice. He took over the practice of the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e practice with goodwill. 9. In such matters it is important to note that what was the dominant intent. The intent can be translated with reference to the subsequent conduct. The factum of transfer could best be interpretated by reference to what precedes and what follows it. This idea is inculcated in the well known dictum: ex antecedentibus et consequentibus pit optima interpretatio. It is a fact that the assessee is an old man. He surrendered his certificate of practice. The sum of Rs. 2,01,000 was received in consideration of the transfer of practice. The transfer was of an intangible asset for which cost of acquisition was 'nil'. It is all very well to paint justice blind, but she does better without a bandage round her eyes. She s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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