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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi
Per Shri P.M. Jagtap:- These two appeals, one filed by the assessee being Revenue being are cross appeals, which are directed against the order of ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 2 of 14 ld. Commissioner of Income Tax (Appeals)-XXXVI, Kolkata dated 06.11.2012 for the assessment year 2003-04.
First we take up the appeal of the assessee, Ground No. 1 of which disputes the addition of Rs.1,46,00,000/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) to the total income of the assessee rejecting the stand of the assesese that the same is capital receipt.
The assessee in the present case is an individual, who is a Chartered Accountant by profession. The return of income for the year under consideration was filed by him on 27.11.2003 declaring total income of Rs.72,35,276/-. In the said return, the sum of Rs.1,46,00,000/- was claimed to be exempt by the assessee from tax and the following note was appended to the return to support and substantiate the said claim:- “Income exempt from tax- capital receipts- during the year, I have received Rs.1,46,00,000/- from EYLLP through accounting partners trust upon termination of my employment with Ernst & Young Pvt. Limited. Since the payment is received neither from my employer nor on behalf of my employer ( & since there was no obligation upon my employer to pay such amount to me), it is not taxable as profits in lieu of salary under the Income Tax Act, 1961. Further, Courts have held that consideration received for giving up employment right is a capital receipt. Hence, applying this principle, the amount received by me is not taxable”.
During the course of assessment proceedings, it was also submitted by the assessee that the sum of Rs.1,00,00,000/- (net of tax) was received from Ernst & Young LLP through Accounting Partners Trust-1 upon his cessation of employment with Ernst & Young. It was contended that since the said amount was in the nature of capital receipt, it was exempt from tax and the same, therefore, was not included as part of total income declared in the return. Reliance in support of this contention was placed by the assessee on the decision of the Hon’ble Supreme Court in the case ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 3 of 14 of Naresh Narayan Saxena –vs.- CIT reported in 220 ITR 19. This stand of the assessee was not found acceptable by the Assessing Officer and the sum of Rs.1,46,00,000/- was brought to tax by him in the hands of the assessee as income from salary for the following reasons given in paragraphs no. 4.1 and 4.2 of the assessment order:- “4.1. I have considered the submission of the assessee. The decision of the Hon'ble Supreme Court cited by the assessee is not applicable here as the facts of the said case are not similar to the present case. I wanted to examine the terms and conditions of the deed of the Accounting Partners Trust-1 through which the assessee claims to have received the said money which the assessee claims as compensation. The Office of the Trust is at New Delhi. The Trustee of the said trust has stated that the money was received from the Ernst & Young Global Services, in short EYGS, for payment to the retiring partners. A copy of the balance sheet of the trust as on 31.03.2003 sent by the Trustee is enclosed. Unfortunately, the copy of the trust deed was not made available to me for examination. They have expressed inability to furnish the copy of the deed. It has been stated that the assessee was paid the above money by the said trust as per the balance sheet and Statement of Receipts & its Application (enclosed as Annexure ‘B’ to this order). It is not clear why the said trust was formed and on which grounds the said money was paid to him. The assessee claims that he was paid the same upon his cessation of employment with his employer Ernst & Young Pvt Ltd. The assessee has wanted to make it a point that he has received the said amount as compensation for the loss of source of income which he would have been receiving had he continued as an employee. I have stated earlier that the terms of the deed could not be examined. I should mention here that the assessee was also a partner in a firm namely, M/s. S. R. Batliboi & Co. from where he had retired during this year. The money was received by the assessee upon his cessation of employment and retirement from partnership firm. It may be noted that the said amount was not paid by his employer or his firm directly. It is not clear in absence of the deed of the trust or clarification of the trustee whether the money was paid to the assessee on cessation of employment or retirement from partnership firm. The said money termed as compensation was received on premature cessation or retirement either from employer or partnership. The salaried persons are being paid compensation upon voluntary retirement prior to the normal date of retirement. The said compensation is being taxed as salary income under the Act. The Act has not exempted the compensation of salary income. The present case is very similar. The assessee states that he has received compensation ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 4 of 14
upon cessation of employment in lieu of the regular income by way of salary. Therefore, in my view, the compensation of Rs.1,46,00,000/- received by the assessee upon his retirement is a salary income chargeable to tax. If the assessee was paid the said compensation on premature retirement from the firm, then the compensation would be the professional income chargeable to tax. Here, upon the version of the assessee and without prejudice to my second finding made above, the receipt of Rs.1,46,000/- is chargeable to tax as salary income of the assessee.
4.2. It appears that the assessee has misunderstood the meaning of "loss of source of income". In my considered view the loss of source of income is one which is beyond the control of the employee. The assessee has voluntarily opted for retirement. Therefore, the amount received due to his retirement is in lieu of salary. It makes no difference whether the retirement benefit is paid by the employer or by any trust created for providing retirement benefit. In absence of trust deed, it is not ascertainable as to what were the objects of the trust, who were contributors of the trust corpus and what were the terms and conditions for payment of retirement benefit to retiring partner. However, one fact is obvious that the assssee has received the benefit only because of his continuation in the employment in past for which he has received salary. Therefore, in my view, the compensation of Rs.1,46,00,000/- received by the assessee on his cessation of employment is in lieu of salary and hence it is a salary income chargeable to tax”.
The addition of Rs.1,46,00,000/- made by the Assessing Officer treating the amount in question as income from salary was challenged by the assessee in appeal before the ld. CIT(Appeals). During the course of appellate proceedings, it was submitted by assessee that he had given up his entitlement for receipt of pension rights like others in the same case in the firm because of a change in its constitution and since Ernst & Young Global had made the payment for giving up right of pension, the amount in question was claimed to be exempt from tax being receipt of capital nature. It was also contended that the assessee being a partner of the firm of M/s. S.R. Batliboi & M/s. S.R. Batliboi Associates, there was no employer and employee relation between the assessee and the firm, which had paid the amount in question and, therefore, the said amount could not be considered as profit in lieu of salary chargeable to tax under ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 5 of 14 the provision of section 17(3) of the Act. This contention of the assessee was not found acceptable by the ld. CIT(Appeals), who proceeded to confirm the addition of Rs.1,46,00,000/- made to the total income of the assessee on this issue after discussing all the relevant aspects of the matter in paragraphs no. 4.2 to 4.5 of his impugned order, which are extracted below:- “4.2. The Assessing Officer observed in the assessment order that the appellant who was due to retire in later years would have received pension in accordance with the partnership deed. He compared the appellant's case with that of a person who retires prematurely and receives payments on that account. The Ld. AR argued that Section 17 of the Income tax Act could not apply in the appellant's case. The appellant being partner of a firm of M/s. S. R. Batliboi & M/S S. R. Batliboi Associates there was no employer employee relationship between the appellant and the Firm. It was his position that the appellant could not be said to have received the payment under any consideration from his employer or former employer. He vehemently submitted that the provisions of Section 17(3) did not apply and the amount received cannot be considered as profit in lieu salary.
It is correct that there was no employer employee relationship between the appellant and the Firms of which he was a partner. It is however a fact that the lumpsum payment was received in consideration for giving up pension rights. Where any the terms of an agreement governing professional relationship and matters incidental thereto undergo changes as in the impugned case any payment received as a result becomes a professional receipt. It is therefore incontrovertibly liable to tax as income from profession. The amount so received would otherwise have been available to him post - retirement by way of pension for the rest of his life time. Pension is a revenue receipt and giving up a right thereto would not constitute a situation of non-taxable capital receipt. The fact that the amount was paid by M/s. Ernest Young & Global though Accounting Partners Trust Fund 1 has no bearing on the taxability of the amount paid to the appellant. If the person chooses to receive in a lumpsum what he could have received by way of monthly payment, there is no connotation of capital nature in spectrum of tax in this case.
Those cases embraced situation when present business set ups ceased to exist or a source from which was being currently derived which was not the position in the instant ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 6 of 14 but merely involved the concept of a voluntary change in terms which was devoid of any impact on taxability. "Pension" to the partners from the firm would constitute professional income which is liable to tax. The chorales taxability would not cease because the partners decided to receive such income in another manner. Taxable laws do not become inapplicable because income which is taxable is by a convenient manoeuvre received in another form. Sec. 176(4) of Income Tax Act is clear on this issue. The provisions are produced as below:-
(4) "Where any profession is discontinued in any year on account of the cessation of the profession by, or the retirement or death of, the person carrying on the profession, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the ear of receipt, if such sum would have been included in the total income of the aforesaid person had it been received before such discontinuance."
4.3 The Ld. AR quoted the verdict in the case of Kettle well Bullen & Co. Ltd. (35 ITR 261)(SC), Vazir Sultan & Sons (36 ITR 175)(SC) and Oberoi Hotel Pvt. Ltd. (236 ITR 903)(SC), and Naresh Narayan Saxena vs. CIT 220 ITR 19 in support of his contentions. These cases relate to receipts against loss of business assets or sources. Thus these judgments are distinguished vis-a-vis the appellant's case. His profession did not cease and the source of such income not extinguished but there was only a change in terms which cannot have the effect of negating the provisions of the I. T. Act 1963. In any case payment receivable from the firm under the appellation of "pension" is a contingent right. It was dependent on the appellant surviving till the date of retirement which was not a certainly and then parameter of how long he survived. To exchange such a situation for a handsome payment was not tantamount to dismantling an apparatus. When the payment was received from Ernest & Young pension was a distant and contingent issue. To borrow an analogy the concept of pension in the case of an employee is not applicable during continuation of his service and if any payment was made on lieu thereof it would become taxable as "profit in lieu of salary". Likewise in a professional set up a future contingent receipt is converted into present lump sum its character as income will not undergo any change and can have no impact on its taxable. Tax laws do not land themselves to such manipulation nor sleight of hand operations to defeat its end to escape a rightful imposition.
./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 7 of 14
4.4. It is not possible to say that the appellant was forced to accept a capital sum in lieu of his pension. He voluntarily chose to accept income by way of payment from Ernest Young & Global through Accounting Partners Trust - 1. The pension could not ha e been a non-taxable item and the appellant's preference to receive lump sum money carries the same connotation. Pension itself is not a capital asset but a revenue one. The payment so received in of optional change does not fall out of the umbrella of taxability.
4.5. During appellate proceeding dt. 12.06.2012 appellant mentioned that "If I would have received compensation from E&Y, then it is revenue receipts. Since I have received from Accounting Partner Trust-I it is capital receipt". Here mode of receipt is not important but purpose of receipt is important. Appellant himself admitted the receipts are taxable. It is a receipt for premature retirement. Accounting Partners Trust- I merely helped to facilitate the receipt of compensation from E& Y Ltd. After retiring from S R Batliboi & Co., taken over E & Y Kolkata, appellant being C.A. by profession started his own partnership concern in the name & style of M/s. Doshi, Chatterjee, Bagri & Co. Appellant never lost the qualification but change it from one to another professional concern. Hence the appellant's contentions in this behalf do not form any basis for its consideration as receipt exempt from tax. The addition of Rs.l,46,00,000/-is therefore confirmed”.
We have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee has contended that this issue involved in Ground No. 1 of the assessee’s appeal is squarely covered in favour of the assessee by the decision of the Coordinate Bench of this Tribunal in the case of Mr. Ramkrishna Agarwal –vs.- ACIT rendered vide its order dated 17.07.2014 in wherein a similar amount received by the assessee as compensation for giving up his right to receive pension was held to be capital receipt not chargeable to tax by relying on the decision of the Hon’ble Delhi High Court in the case of Khanna and Annadhanam reported in 351 ITR 110. However, as rightly pointed out by the ld. D.R., the amount in question received by the assessee was never claimed by the assessee either during the course of assessment proceedings before the Assessing Officer or even in the statement of facts filed before the ld. ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 8 of 14 CIT(Appeals) to be the amount received for giving up his right to receive pension and although this claim was made by the assessee for the first time before the ld. CIT(Appeals), the impugned order of the ld. CIT(Appeals) does not show that he has verified the same from the relevant documentary evidence, such as the relevant partnership deed giving the assessee his right to receive pension, agreement whereby the right to receive pension, if any, was given up by the assessee for the amount in question, etc. He has contended that this matter may, therefore, be sent back to the file of the Assessing Officer for verifying the claim of the assessee. Since this position pointed out by the ld. D.R. is clearly evident from the orders of the authorities below and the ld. Counsel for the assessee has also not disputed the same, we set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh in the light of the decision of the Coordinate Bench of this Tribunal in the case of Mr. Ramkrishna Agarwal (supra) after verifying the claim of the assessee from the relevant documentary evidence. Needless to mention, that the assessee shall offer proper and sufficient opportunity of being heard to the assessee. Ground No. 1 of the assessee’s appeal is accordingly treated as allowed for statistical purposes.
In Ground No. 2, the assessee has disputed the addition of Rs.22,56,250/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of share of goodwill received by the assessee on his retirement from the partnership firm of M/s. S.R.. Batliboi & Co.
During the year under consideration, the assessee had retired from the partnership firm of M/s. S.R. Batliboi & Co. Upon his retirement, he was paid, inter alia, a sum of Rs.22,56,250/- in lieu of the goodwill from the said firm and the same was claimed to be exempt by the assessee from tax being in the nature of capital receipt. The claim made by the assesee ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 9 of 14 in this regard was that the said amount could not be taxed even as capital gains since there was no transfer of goodwill. This claim of the assessee was not accepted by the Assessing Officer and the sum of Rs.22,56,250/- received by the assessee as his share of goodwill from M/s. S.R. Batliboi & Company on his retirement was brought to tax by the Assessing Officer in the hands of the assessee under the head “income from other sources” for the following reasons given in paragraph no. 5.1 of the assessment order:- “5.1. The firm created goodwill and apportioned the same amongst the partners and credited the value of the goodwill to the accounts of the partners according to the profit sharing ratio. On creation of the goodwill, it does not ipso facto become any income in the hands of the firm but the value of the goodwill depends on the reputation and the quantum of income generated/earned in the post. Therefore, when it is paid to the partner on retirement, the partner's share in the profit and loss ratio assumes the character of distribution of the firm's accumulated income in the form of goodwill which was not taxed in the firm's hands. The money received from the firm by a partner on account of his capital is a capital receipt because what is received by the partner is his own capital which was either contributed by him or was out of accumulation of profit subjected to tax. But when it is received on account of goodwill, it is not his capital contribution or out of income accumulation subjected to tax in firm's hands. As he receives any money in lieu of goodwill, the said money becomes his income as he gets it by virtue of his being a partner and in exercise of his profession. Moreover, any income has to be taxed either in the hands of the earner or receiver of income in beneficial capacity. Therefore, I do not agree with assessee's contention that his share in goodwill received on retirement is a capital receipt, rather it is casual receipt in the nature of income which was not taxed in the hands of firm. Moreover, this receipt is not liable to be taxed under any of the heads from A to E of section 14 of the Act. In view of the opening sentence of section 56 of the Act, such receipt of income is liable to be taxed as income from other sources. Accordingly, I treat the assessee’s share of goodwill of Rs.22,56,250/- as income from other sources and include the same in assessee’s total income”. ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 10 of 14
On appeal, the ld. CIT(Appeals) confirmed the said addition made by the Assessing Officer after recording the following observations in paragraph no. 6 of his impugned order:- “6. I have considered the A.O.'s findings as well as submissions made by appellant carefully including number of case laws cited in written submission. Goodwill though not defined in the I.T. Act, 1961 (the Act) it is a capital asset for the purpose of computing capital gain as is clear from section 55(2)(a) of the Act which provides for cost of acquisition of Goodwill trade mark etc. for the purpose of computation of capital gain.
In present case it is an admitted fact that the terms of partnership of M/s. S.R. Batliboi & Co. (the Firm) there is a provision since inception that Goodwill, if any, of the Firm shall always belong to the Firm and that none of the partnership would have any right, title or interest in goodwill of the Firm of whatsoever nature. Inspite of this term, during the year under appeal firm created goodwill as an asset in its books by debiting to Goodwill Account and crediting to the accounts of the then partners in their profit sharing ratio. Accordingly in previous year ended on 31-03-2003 the Firm credited Rs.22,56,250/- to the accounts of the appellant on account of goodwill apart from other credits on account of interest on capital and share of profit. Out of total credit appellant withdraw Rs.2,41,71,614/- overdrawing by Rs.7,32,237/-.
Thus the credit in appellant's account is for goodwill Rs.22,56,250/- of the Firm which is clearly liable to be taxed as capital gain. Here, an issue may be raised that the goodwill so created by Firm in its books will be/ can be sold by firm only as the appellant has not sold goodwill to anyone. But the Firm on sale of goodwill at a future date will claim deduction against sale consideration as cost of acquisition the total amount credited to all the partners as goodwill during the year under reference and can avoid payment of capital gain tax substantially, in terms of section 55(2)(a)(i) of the Act. Sec. 10(2A) of the Act invoked by the appellant cannot help him as said section deals with share of a partner in the total income of the firm and not share of goodwill of the firm.
In appellant's case he is being credited his share in goodwill which credit goes in creation of goodwill in the Firm's assets. In such case provisions of section 55(2)(a)(i) which provides that in cases where there is no purchase of goodwill cost of acquisition will be considered as "nil" as appellant has not purchased goodwill which is covered by sub-clause (i) of clause (a) of section 55(2) .
./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 11 of 14
In view of above no intervention is called for in A.O.'s action except that in place of income from other source it is to be taxed as long term capital gain as the amount is for goodwill received by the appellant from the Firm”.
We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. As agreed by the ld. Representatives of both the sides, this issue involved in Ground No. 2 of the assessee’s appeal is squarely covered in favour of the assessee by the various judicial pronouncements including the decisions of the Coordinate Benches of this Tribunal. In one such decision rendered in the case of Shri Amitabh Singh (ITA No. 1996/DEL/2006), Hon’ble Delhi Bench of this Tribunal decided the similar issue in favour of the assessee in the identical facts and circumstances for the following reasons given in paragraph no. 5 of its order:- “5. We have considered the facts of the case and rival contentions. The revenue’s case is primarily based on the provision contained in section 55(2) under which the cost of goodwill has to be taken as nil if it has not been purchased from a previous owner. Such is the case here nonetheless, this cost is for the purpose of sections 48 and 49, which deal with the mode of computation of the income chargeable under the head capital gains. Before coming to the mode of computation, it has to be seen whether any amount is chargeable to capital gains tax u/s 45, which is the charging section. The ld. DR was not able to explain how provisions of section 45 were applicable in the instant case. Sub-section 4 of this section deals with profits or gains arising from the transfer of a capital asset by way of distribution of capital asset on dissolution or otherwise of a firm, and brings to tax the capital gains in the hands of the firm. However, we are dealing with a case of the partner here. The firm acquired goodwill over a period of time, which was brought into the books and distributed amongst existing partners before the new partners were taken in and some existing partners retired. The asset of the firm already existed and it was quantified and credited to the accounts of existing partners. Similarly, when the assessee retired from the firm, he did not transfer any goodwill to the film as he did not have any individual goodwill. The goodwill belonged to the firm and continued to remain with the firm. As clarified by the ld. Counsel, nothing was charged from the incoming partners by way of goodwill and, thus, there is no question of even indirect ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 12 of 14
realization of the value of goodwill by the assessee from the incoming partner through the firm in a number of cases, referred to above, it has been held that what a partner gets at the time of retirement is nothing but his own share in the assets of the firm. In such a scenario, there cannot be any transfer of an asset and such has been the decision of Hon'ble Supreme Coon in the case of Mohanbhai Pamabhai and Tribhuvandas G. Patel (supra). The fact is that a provision corresponding to sub-section (3) regarding levy of capital gain tax when a partner brings in a capital asset to the firm does not exist on the statute book in case of retirement of the partner and, thus, general provisions of law, namely. that what he takes is his share in the assets of the firm continues to apply with the exception that under sub- section (4), when a capital asset is distributed to the partner on dissolution of the firm or on his retirement at less than the fair market value, then, the firm becomes liable to pay capital gains tax. Such is not the case here, as we are dealing with the case of a partner. Therefore, we concur with the ld. CIT(Appeals) that nothing was taxable in the hands of the assessee”.
The Coordinate Bench of the Tribunal at Kolkata also had a occasion to consider the similar issue in the case of Nawshir H. Mirza, wherein the case of the assessee for exemption on account of share of goodwill received on retirement was held to be capital receipt not chargeable to tax by the Tribunal for the following reasons given in its order dated 11.01.2008 passed in “9. We have considered the facts of the case and rival contentions and are of the view that the order of the ld. CIT(A) needs to be upheld and does not call for any interference. In the instant case, it is not disputed that the said firms were having self generated goodwill which was valued by them during the present assessment y.ear There has been no transfer of such goodwill by the said firms. The firms still own and hold such goodwill and the assessee who has retired has no interest of any nature whatsoever therein. The revenue's case is primarily based on view that money received. in lieu of goodwill from the firm by the partner is casual receipt in the nature of income which is not taxable in the hands of the firm. What the partners got at the time of the retirement including the amount credited for the goodwill of the firms is a capital receipt in their hands. The partners did not own the goodwill nor did they transfer the same. The goodwill all along remained with the firm as its asset even after the retirement of the partners. What the partners got on retirement was for the value of their interest in the firm. This ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 13 of 14
view is duly supported by various decision cited by the Ld. Authorised Representative including the decision .of Apex Court in the case of Sunil Siddharthhbhai vs. CIT (supra).
9.1. In the instant case, the firms have not realized any amount on account of goodwill hence the question of any assessment being made in their hands does not arise. The notional valuation of the goodwill in its accounts by the firm does not result in any transfer which can attract capital gains as has also been clarified by the Board in its Circular No.495 dated September 27. 1987. Even the amendment made in Section 55(2) of the Act is of no help to the case of the Department in view of the clarification made by the Board.
We fail to appreciate how the amount could be assessed in the hands of the partners and that too under the head "Income from other sources. Goodwill is an intangible asset and transfer/surrender of which would attract Section 45 so that the value received would be a capital receipt and assessable if at all only under item 'E' of Section 14. It cannot be treated as a casual receipt and be subjected to tax under Section 56. The argument that even if the income cannot be chargeable u/s. 45, because of the inapplicability of the computation provided u/s. 48, it could still impose tax under the residuary head is thus unacceptable. If the income cannot be taxed u/s. 45, it cannot be taxed at all as has been held in the case of S.G. Mercantile Corporation (P) Ltd. –vs.- CIT [1972] 83 ITR 700 (SC)”.
As the issue involved in the present case as well as all the material facts relevant thereto are similar to the cases of Shri Amitabh Singh (supra) and Nawshir H. Mirza (supra) decided by the Coordinate benches of this Tribunal, we respectfully follow the decision rendered in the said cases to hold that the amount in question received by the assessee as his share of goodwill on retirement from the firm is not chargeable to tax being capital receipt. The addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on this issue is accordingly deleted. Ground No. 2 is accordingly allowed.
As regards the appeal of the Revenue, it is observed that the solitary issue involved therein relates to the taxability of the amount of Rs.22,56,250/- received by the assessee on account of his share of ./2012 Assessment year: 2003-2004 & I.T.A. No. 120/KOL./2013 Assessment year: 2003-2004 Page 14 of 14 goodwill from the firm on retirement. Since this issue has already been decided by us while disposing the appeal of the assessee, we do not find any merit in this appeal filed by the Revenue. Even otherwise, the tax effect involved in this appeal of the Revenue is less than the prescribed monetary limits of Rs.3,00,000/- as applicable at the relevant time for filing of appeal before ITAT. This appeal of the Revenue thus is not maintainable and is liable to be dismissed on this ground also.
In the result, the appeal of the Revenue is dismissed, while the appeal of the assessee is partly allowed as indicated above.