06 August 2012
Goodwill is a capital asset and on its transfer by a business, capital gain arises. In sec 55( cost of acquisition ), the method to compute cost of acquisition of goodwill of BUSINESS is given( and the method to determine the same in case of profession is not given) therefore it is said that cost of acquisition of goodwill of a profession is indeterminate. therefore no capital gain arises on its transfer. the same was decided by Supreme Court in case of B Shrinivasa Shetty.
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