S.P. Goyal, J.
1. During the accounting year 1973-74, an amount of Rs. 32,500 was claimed as 'business expenses' having been paid to the heirs of the deceased partner Mongi Lal, who died on August 18, 1972. In the return, the payment was said to have been made on account of goodwill of the firm. The assessing authority, taking the amount as having been paid for purchase of the goodwill, disallowed the same as business expenses. Its finding was affirmed on appeal by the AppellateAssistant Commissioner. However, the Tribunal being of the view that it was only the use of the goodwill which had been purchased reversed the order of the Appellate Assistant Commissioner. On an application by the Revenue, the following question of law was referred to this court :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 32,500 is allowable as revenue expenditure ?'
2. It is not disputed by the learned counsel for the Revenue that in spite of the death of Mongi Lal, the partnership consisting of the remaining partners continued. The amount was paid long thereafter in the year 1973-74. On these facts, the question that arises for determination would be as to 'whether the said amount was paid for the purchase of the goodwill or for its use'. Obviously the answer has to be that it was only the exclusive use of the good will which was purchased. As the firm had never been dissolved and was continuing, the remaining partners had the right to use the goodwill. Similar right the heirs of the deceased partner have. So, by making the said payment, the continuing partners acquired use of the goodwill to the exclusion of the heirs of the deceased. The transaction, therefore, did not involve the purchase of any goodwill, but what was purchased was only the exclusive right of its use. The referred question is accordingly answered in the affirmative, i.e., in favour of the assessee and against the Revenue. No costs.