Law:

Section:

Section 12B of the Indian Income-Tax Act, 1922 [corresponding to section 45 of the income-tax act, 1961] - Capital gains - Changeability Of - Assessee-company formed in 1942 by converting firm and acquired firm's business for consideration which included value of goodwill-In 1946 all its shares purchased by few others with intention to transfer all its assets and business, as a going concern, at cost to a public limited company to be formed by them-Resolutions approving transfer and voluntary winding up passed by company on 23-4-1947-Formal agreement executed on 5-4-1948 showing, inter alia, date of purchase as 1-4-1947 and certain value of goodwill-Whether impugned transfer of business including goodwill. could legally be said to have taken place on 23-4-1947- Held, on facts, no-Whether impugned transfer of business; including goodwill, had resulted in any capital gains liable to tax under section 12b for assessment year 1948-49 - Held, on facts, no-Whether tribunal justified in not allowing assesses to raise question as to whether goodwill was properly assessable to capital gain under section 12B-Held, on facts, no FACTS The assessee-company was formed in 1942, by converting a partnership firm. It agreed to purchase the firm's goodwill with exclusive right to use its name for continuing the same business of general merchandise. The total purchase consideration of Rs. 3,89,278 included a sum of Rs. 47,481 shown as goodwill in its first balance sheet. By a subsequent agreement dated 19-8-1946, all its shares were purchased by one DS and some other persons for a total consideration of Rs. 12,40,804, including Rs. 4,98,987 assessed as the value of its goodwill, with a view to transferring all its assets and business, a going concern, at cost to a public limited company to be promoted by them. In its extra ordinary general meeting held on 23-4-1947, the assessee-company passed resolutions (i) for its voluntary winding up, and (ii) for finally effectuating the intended transfer to it in terms of a proposed draft agreement with certain modifications, if expedient. Accordingly on 23-4-1947 itself, the new public company was incorporated and the draft agreement was…

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