Judgment :- The Order of the Court is as follows: It is submitted by the learned counsel for the Revenue that a transferor who retains the right to use the name under which he was trading and licence the right to use that name by others, when he effects sale of the business carried on by him in some parts of the country to two private limited companies transfer by him and, therefore, the consideration obtained for such sale is only in the nature of the licence fee. The assessee who was carrying on business in the name and style of 'Kappa Electricals' manufacturing electrical goods, transformers, etc. as a proprietary concern at Bangalore, Ahmedabad Calcutta, and some places in Maharashtra, transferred his business at Bangalore and Ahmedabad with its assets and goodwill to a limited company called 'Kappa (P) Ltd.' for a consideration of Rs. 1, 30, 000 which included the value of goodwill, that value being determined as Rs. 15, 000 by an agreement dt. 30th August, 1974. The business at Gujarat and Maharashtra were together with goodwill sold to Kappa Electricals (Gujarat) (P) Ltd. and the goodwill was valued at Rs. 5, 000. The sale was on 7th October, 1974. The AO, for the asst. yr. 1975-76 refused to accept Rs. 15, 000 and Rs. 5, 000 as a capital receipt but treated it as income in the hands of assessee and accordingly assessed the income. In appeal, the AAC agreed with the ITO. On further appeal, after a reference to the third member, in view of the difference of opinion between the two members, the third member has held in favour of the assessee. The terms of the agreement has been set out in the order of the Tribunal. The agreement provided for sale of all the assets of the business as also the transfer of goodwill for the use of the name of 'Kappa' for manufacturing and sale of current transformers in these areas. The transfer when subject to the right reserved to the assessee to carry on business in the name of his proprietary concern, that was a personal right and that did not have the effect of negative the goodwill that was transferred to the newly formed companies. It will only be said that part of the goodwill was also retained by the assessee. It will only be said that part of the goodwill was also retained by the assessee. That factor by itself does not make the transfer one by way of licence for use of the trade mark. It is open to the newly formed companies to exploit the marks preventing others, for using it, or even licensing others to use that name. The only thing these two companies cannot do is to prevent the assessee from using the name in the business that had been carried on by him till the date of the transfer. The transfer, therefore, cannot be held to be a transfer of anything other than goodwill. The goodwill being a self-generating asset is not liable to be taxed at that time as goodwill was not taxable under the law in that year. The amount of Rs. 20, 000 could not have been brought to taxThe question of law referred to us as to whether a sum of Rs. 20, 000 is assessable in the hands of the assessee, is therefore, answered against the Revenue and in favour of the assessee. No costs.