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Self-gernerted goodwill

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(Querist)
06 August 2012 when a person retires from a profession and recives any amount towards self-generated goodwill, it is

a) Taxable as income from profession
b) Exempt income under section 10
c) Not taxable since there is no cost of acquisition
d) Taxable as capital gain

I need answer with sections related to this question and explanation, why income tax act considered on that seciton?
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Pankaj Gupta

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Pankaj Gupta (Expert)
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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RAJEEVA S L

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RAJEEVA S L (Querist)
07 August 2012 ok, under which head it is chargeable
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