JUDGMENT : R. SUDHAKAR, J. 1. This order shall dispose of two appeals; one filed by M/s. Jammu Bottling Co. (P) Ltd., and the other filed by the Commissioner of Income Tax, Jammu, hereafter referred to as "the Revenue". Both the appeals filed under Section 260-A of the Income Tax Act, 1961, are directed against the common judgment passed by the Income Tax Appellate Tribunal, Chandigarh Bench on 16th July, 2014, whereby the appeal filed by the Revenue and the cross objections filed by the Assessees, namely, M/s. Jammu Bottling Company (P) Ltd., have been dismissed. 2. Both the appeals were admitted by this Court on the substantial questions of law framed separately in each appeal. For facility of reference, the questions of law formulated by this court in the appeals vide its order dated 01.10.2015 respectively, are reproduced hereunder:- ITA No. 2/2005: (i) Whether on the facts and circumstances of the case the Hon'ble Tribunal could in law hold that the value of goodwill is only of Rs. 2.00 crores when goodwill has been sold by the appellant for a consideration of Rs. 10.00 crores. (ii) Whether the Hon'ble Tribunal in law could fix any amount as the value of the goodwill of the appellant without referring to any evidence for reaching the said figure of Rs. 2.00 crores and also without giving justifiable reasons for the same. Moreso when the appellant has correctly valued the goodwill and calculated it on correct basis also, (iii) Whether the finding of the Hon'ble Tribunal that value of goodwill is 2.00 crores are liable to be set aside being perverse and based upon no evidence or material and the value of the goodwill has to be taken at Rs. 10.00 crores. (iv) Whether in law and in the circumstances of the case the Hon'ble Tribunal misdirected itself while holding that part of the value of goodwill which is excessive in its opinion (i.e. Rs. 8.00 crores) be added and considered as also the sale consideration of the business; when at the time goodwill amount was received, there was no agreement of Sale of business and as the Hon'ble Tribunal has held the slump sale consideration of Rs. 201781021.00 as correct." IT No. 3/2005: "(i) Whether in the facts and circumstances of the case the ITAT was right in law in fixing Rs. 2.00 crores as the Good Will of the Company? 201781021.00 as correct." IT No. 3/2005: "(i) Whether in the facts and circumstances of the case the ITAT was right in law in fixing Rs. 2.00 crores as the Good Will of the Company? (ii) Whether the ITAT was right in fixing the goodwill of the Company at Rs. 2.00 crores without adopting a definite method of valuing the goodwill?" 3. From the perusal of questions of law formulated by this court, it is abundantly clear that the dispute in both the appeals is essentially with regard to the valuation of goodwill of the assessee which the assessee claims to be in a sum of Rs. 10 crores whereas the Income Tax Department declined the payment as goodwill, however, treated it as part of sale proceeds and to be dealt with accordingly. The Commissioner Income Tax (Appeals) reduced the goodwill to the tune of Rs. 2 crores. The appellate Tribunal has confirmed it at Rs. 2 crores. The stand of the Revenue, however, is that the Assessee had no goodwill to transfer and, therefore, the amount representing goodwill was nothing but sale consideration of the assessee's unit. 4. To appreciate the controversy in its proper perspective, it would be appropriate to take note of the facts of the case of M/s. Jammu Bottling Company (P) Ltd. As a matter of fact, the Commissioner Income Tax (Appeals) gave the main decision in the case of M/s. Jammu Bottling Company (P) Ltd., and the same was, thereafter, made applicable to another case of M/s. Aab-E-Hayat Company (P) Ltd. M/s. Jammu Bottling Company (P) Ltd. (hereinafter referred to as "the Assessee Company"), was carrying on business of manufacture and sale of soft drink beverages. The assessee company was set up in the year 1974-75 and went into commercial production in the year 1975-76. The said assessee company was manufacturing, bottling and selling the soft drinks as franchise of Hindustan Coca-Cola Bottling, a Multi National Company. The assessee company sold its entire business, assets, land, building, machinery and other equipment to Hindustan Coca-Cola Bottling Multi National Company as slump sale at a price of Rs. 201781021/-. The sale was conducted pursuant to agreement executed on 07.12.1998. There was, however, a separate agreement for purchase of goodwill of the assessee company executed between the parties on 6th August, 1998. The goodwill price was Rs. 10 crores. 5. 201781021/-. The sale was conducted pursuant to agreement executed on 07.12.1998. There was, however, a separate agreement for purchase of goodwill of the assessee company executed between the parties on 6th August, 1998. The goodwill price was Rs. 10 crores. 5. It appears that assessee company initially showed capital gain of Rs. 9 crores on the sale of its unit but subsequently claimed that on account of slump sale, there was no profit or gain earned by the assessee company. The assessee company further claimed that it had received Rs. 10 crores separately by way of sale of its goodwill and had invested the same in specified securities in terms of Section 54-EA of the Income Tax Act. 6. The Assessing Authority made the assessment in the year 1999-2000 in which it was noted that the total sale consideration claimed by the assessee company was only Rs. 201781021/-, which did not include Rs. 10 crores received separately in lieu of goodwill. On facts, the Assessing Authority found that assessee company which had been continuously making losses had no goodwill to offer for sale and that Rs. 10 crores received by assessee company was essentially part of sale consideration of the business sold as a whole. Accordingly, the Assessing Authority computed the capital gain by including Rs. 10 crores claimed to have been received by the assessee company in lieu of goodwill as part of sale consideration. 7. Aggrieved, the assessee company filed appeals before the Commissioner of Income Tax (Appeal). The Commissioner of Income Tax (Appeals) did not interfere with the findings recorded by the Assessing Authority under Section 54 EA of the Income Tax Act but, however, held that instead of Rs. 10 crores claimed as goodwill by the assessee company, the valuation of the goodwill should be taken as Rs. 2 crores only. Accordingly, Rs. 08 crores were directed to be taken as part of sale consideration of the business and the direction was issued to compute the capital gains accordingly. This was done by the Commissioner Income Tax (Appeals) vide its order dated 09.01.2001. The operative portion of the order of the Commissioner Income Tax (Appeals) is reproduced as under: "10.5. The Assessing Officer has computed the capital gain with reference to the sale consideration of Rs. 30,17,81,021/-. He is directed to recompute the gain by taking the sale consideration at Rs. 28,17,81,021/-, as discussed above. The operative portion of the order of the Commissioner Income Tax (Appeals) is reproduced as under: "10.5. The Assessing Officer has computed the capital gain with reference to the sale consideration of Rs. 30,17,81,021/-. He is directed to recompute the gain by taking the sale consideration at Rs. 28,17,81,021/-, as discussed above. He is also directed to take the acquisition price at Rs. 24,11,43,108/-. The capital gain may be recomputed by taking into account these figures. 11.1. The last ground of appeal is general in nature and does not call for any specific adjudication. 12.1. In the result, the appeal is partly allowed, as indicated above." 8. The order of the Commissioner Income Tax (Appeals) was not accepted either by the Revenue or by the assessee company and accordingly, both of them approached the income Tax Appellate Tribunal (for short the appellate tribunal) through appeal and cross objections respectively. 9. The appeal preferred by the Revenue and the cross objections filed by the assessee company along with another appeal filed by the Revenue against the assessee M/s. Aab-E-Hayat Company (P) Ltd., and cross objections filed by the assessee M/s. Aab-E-Hayat Company (P) Ltd., were all taken together and decided vide impugned judgment in these appeals. The appellate tribunal concurred with the order of the Commissioner Income Tax (Appeals) and dismissed both the appeals filed by the Revenue as also the cross objections filed by the assessee company and one by M/s. Aab-E-Hayat Company (P) Ltd. 10. The Revenue as well as the assessee company is in appeal before us. As stated above, all the appeals under consideration were admitted on the aforesaid common questions of law. 11. Learned counsel for the appellant assessee company submitted that the assessee company was the only company in the business of manufacture and sale of soft drink beverages in the Jammu province and biggest in the state of Jammu & Kashmir and had thus earned name and fame by being in business for the last more than four decades. The assessee company, it is urged, had been making sufficient profits, and the losses were only on account of depreciation debited in the profit and loss account. The assessee company, it is urged, had been making sufficient profits, and the losses were only on account of depreciation debited in the profit and loss account. It was claimed that the assessee company had a leading bottling plant in the State and the very fact that Hindustan Coca-Cola Company preferred to buy the assessee's company rather than setup another concern of its own goes a long way to show that the company had a name and goodwill earned over a period of time. It was thus contended that the Commissioner Income Tax (Appeals) and the appellate tribunal both committed a serious error in limiting the assessee's claim of goodwill only in a sum of Rs. 2 crores. Learned senior counsel for the assessee company emphasized that the buyer company had with its eyes wide open purchased the goodwill for a sum of Rs. 10 crores by way of a separate agreement executed in this behalf. The learned counsel further submitted that the aforesaid agreement with regard to purchase of goodwill was executed on 6th August, 1998, whereas, the unit was purchased as slump sale subsequently in terms of agreement executed on 7th December, 1998. 12. Learned counsel for the appellant assessee company next contended that the order of Commissioner Income Tax (Appeals) as upheld by the appellate tribunal vide judgment impugned is not sustainable in so far as it has valued the goodwill of the assessee company limited at Rs. 2 crores for the reason that Commissioner Income Tax (Appeals) as also the appellate tribunal has not given any reasons muchless the cogent reasons not to accept the valuation of Rs. 10 crores towards goodwill which was the sum actually received by the assessee company in lieu of goodwill. It was thus submitted that both the forums below put the valuation of goodwill sold by the assessee company at Rs. 2 crores on the basis of mere speculations, conjunctures and surmises. It is emphasized that the Commissioner Income Tax (Appeals) and the appellate tribunal do admit that the assessee is entitled to goodwill. The value of goodwill has been reduced arbitrarily. 13. Per contra the learned counsel appearing for the Revenue submitted that given the fact that the assessee company had been making consistent losses over the years, it cannot be said that the company had a name and fame and, therefore, there can be no goodwill worth Rs. The value of goodwill has been reduced arbitrarily. 13. Per contra the learned counsel appearing for the Revenue submitted that given the fact that the assessee company had been making consistent losses over the years, it cannot be said that the company had a name and fame and, therefore, there can be no goodwill worth Rs. 10 crores, that too when the net worth of the company itself was Rs. 20 crores (approximately). On behalf of the Revenue, it was urged that the assessee company was manufacturing, bottling and selling soft drink beverages under the franchise of Hindustan Coca-Cola Company Limited, it had no brand of its own and whatever goodwill it claims to have earned was actually the goodwill of Hindustan Coca-Cola Company Limited and, therefore, the Coca-Cola Company Limited would not have purchased the unit of the assessee company by paying additional sum of Rs. 10 crores in lieu of alleged goodwill of the assessee company. It was thus urged that the Assessing Authority being the first fact finding authority had correctly come to the conclusion that assessee company did not have any goodwill to offer for sale and, therefore, the amount of Rs. 10 crores received allegedly in lieu of goodwill was nothing but a part of sale consideration. 14. Having heard learned counsel for the parties and having perused the record, particularly, the order of assessment, the orders of the Commissioner Income Tax (Appeals) and the appellate tribunal, we find that the Commissioner Income Tax (Appeals) as well as the appellate tribunal have not appreciated the issue of "goodwill" in right perspective. 15. Admittedly, the assessee company had claimed a sum of Rs. 10 crores on account of sale of its goodwill which was evidenced by a documentary proof i.e., a separate agreement for sale of goodwill of the assessee company. It is true that the Assessing Authority in the given facts and circumstances and keeping in view the evidences that had been brought on record before him could have rejected such claim but the same should have been supported by reasons and cogent material. Assessing Authority, as is apparent from its order, had concluded that the assessee company had no goodwill to offer for sale for the reason that the company had been consistently making losses over the years. Assessing Authority, as is apparent from its order, had concluded that the assessee company had no goodwill to offer for sale for the reason that the company had been consistently making losses over the years. It was in the opinion of the assessing authority that a company that was consistently making losses cannot claim to have name and fame and, therefore, no goodwill. 16. Be that as it may, the first appellate authority i.e., the Commissioner Income Tax (Appeals), did not agree with the finding recorded by the Assessing Authority and of its own concluded that the assessee company-had goodwill to offer for sale but the same was only a worth of Rs. 2 crores and not Rs. 10 crores as claimed by the assessee company. What was held by the Commissioner Income Tax (Appeals) in paragraph 6.3 needs to be noticed. Paragraph 6.3 reads thus:- "6.3 I have carefully considered the facts of the case and find some merit in the submissions made by the ld. Counsel. It has to be admitted that the appellant company was the leading bottling plant in the State of Jammu and Kashmir. The very fact that no other bottling, at lease on a similar scale, was put up by any other person shows that the company carried a reputation. Even the fact that the buyer preferred to by this company rather than setting up another concern of its own, shows that the company had a name. This name is nothing but a goodwill acquired by the company over a period of time. The entire business of the company is sold for a consideration of Rs. 201781021/- as against that the goodwill is claimed to have been sold for Rs. 10 crores. The price paid for the goodwill apparently appears to be exorbitant. A business having profits just in one out of seven preceding years and declaring loss consistently cannot have such goodwill. The Assessing Officer has held that the company did not enjoy any goodwill. It do not agree with him. At the same time, I am of the view that the price shown to have been received for the goodwill is artificial. Keeping in view the monopoly enjoyed by the appellant company and the results declared in the Income Tax returns, I would hold that a sum of Rs. It do not agree with him. At the same time, I am of the view that the price shown to have been received for the goodwill is artificial. Keeping in view the monopoly enjoyed by the appellant company and the results declared in the Income Tax returns, I would hold that a sum of Rs. 2 crore is sufficient to account for the goodwill enjoyed by the appellant company. The remaining amount of Rs. 8 crores is part of the sale consideration of the business and should be added to the apparent consideration of Rs. 201781021/- The sale consideration for the business this may, would amount to Rs. 281781021/-. 17. The appellate tribunal has concurred with the aforesaid finding recorded by the Commissioner Income Tax (Appeals) without discussing much on the issue. 18. The goodwill of a company is nothing but an established reputation of a business recorded as a quantifiable asset and is calculated as part of its value when it is sold. It is an intangible asset which represents non-physical items that add to business value. But going by the nature of this asset, it is not capable of being easily identified or valued. Various factors are to be taken into consideration for the purpose of evaluating the goodwill of a particular company. Some of the factors like company's brand name, its solid customer base, good customer relations, good employee relations and patents or propriety technology etc., would represent goodwill of a particular company. Reference in this regard is invited to the Division Bench judgment of the Madras High Court rendered in case of Smt. Surumbayi Ammal v. Controller of Estate Duty: 1976 (103) ITR 358 . The Division Bench of the Madras High Court in paragraphs 7 to 10 held as follows:- "7. The Supreme Court also had occasion to consider the meaning of goodwill in S.C. Cambatta & Co. P. Ltd. v. Commissioner of Excess Profits Tax, On a consideration of the various decisions, the Supreme Court observed thus: "It will thus be seen that the goodwill of a business depends upon a variety of circumstances or a combination of them. The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, though locality always plays a considerable part. The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, though locality always plays a considerable part. Shift the locality, and the goodwill may be lost. At the same time, locality is not everything. The power to attract custom depends on one or more of the other factors as well. In the case of a theatre or restaurant what is catered, how the service is run and what the competition is, contribute also to the goodwill." 8. The Supreme Court again in Khushal Khemgar Shah v. Khorshed Banu, referred to goodwill of a businesses: "........an intangible asset being the whole advantage of the reputation and connections formed with the customers together with the circumstances which make the connection durable. It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years because of its reputation, location, and other features." 9. These decisions show that the existence of a goodwill depends on a number of considerations and that merely because a person is dealing in a particular type of goods it could not be stated that there could be no goodwill at all in respect of that business. 10. What are the facts in our case? It is seen from the records that the business was carried on by these firms for a number of years. It had a firm name of its own. The Tribunal had pointed out that it had established a name in the particular line of business which it was conducting. The firms had their own clientele and business contracts. In addition, the parties themselves were conscious that they had gained a goodwill for the business, as seen from the agreement dated 30th April, 1963, referred to above. If there was really no goodwill, there was no necessity for stating in that document, that nobody would be entitled to the goodwill of the firms. Further, ultimately, the decision whether there was goodwill for a firm or not, is a finding to be based on facts. The Tribunal and the authorities below took the view, on the facts, that the firms had goodwill. Further, ultimately, the decision whether there was goodwill for a firm or not, is a finding to be based on facts. The Tribunal and the authorities below took the view, on the facts, that the firms had goodwill. We do not find any reason to take a different view from that of the Tribunal." 19. The learned senior counsel for the appellant relied upon few other judgments to substantiate his submission that "whether the goodwill of a company is calculated in accordance with law" is a question of law. We have deliberately not referred to all those judgments for the reason that we have treated the questions of law reproduced above as substantial questions of law. 20. There are various methods known to law which provide a guide for evaluating the goodwill of a company. There is, however, no straitjacket formula to work out the value of a goodwill of a particular company. As stated above, it would depend upon many factors which are only enumerative and cannot be exhaustive. 21. From perusal of order of Commissioner Income Tax (Appeals) and order passed by the appellate Tribunal, impugned in these appeals, we do not find that the authorities concerned considered all relevant factors for pegging the goodwill of the assessee company at Rs. 2 crores only. It is, however, to be noticed that the Commissioner Income Tax (Appeals) and the appellate tribunal hold that assessee is entitled to goodwill. This finding of fact is based on the agreement and relevant pleading in the original and appeal proceedings. 22. We do not find any discernable reason to reject the claim of the assessee company that it had sold its goodwill. The parameter of claiming goodwill as a separate component are satisfied by the assessee. The reasoning by the Income Tax Officer that loss will disentitle the claim for goodwill will be incorrect. Here is a case of depreciation loss and it is not disputed. Hence, the assessee is entitled to goodwill. The departments stand of no goodwill, therefore, stands rejected. The order of the Commissioner Income Tax (Appeals) and the appellate tribunal holding that goodwill is sustainable separately in the transaction is upheld. 23. The next question will be on the quantum of goodwill. Hence, the assessee is entitled to goodwill. The departments stand of no goodwill, therefore, stands rejected. The order of the Commissioner Income Tax (Appeals) and the appellate tribunal holding that goodwill is sustainable separately in the transaction is upheld. 23. The next question will be on the quantum of goodwill. We have reproduced the order of the Commissioner Income Tax (Appeals) which is upheld by the appellate tribunal vide its judgment impugned and find that the amount of Rs. 2 crores fixed as the sale price of goodwill of the assessee company was on mere speculation. The assessee pleads that the entire sum of Rs. 10 crores is goodwill and has produced supporting claims before the authority. This factor should have been considered by the tribunal thought missed by the Commissioner Income Tax (Appeals). To what extent assessee has justified the claim is in the realm of assessment based on material. 24. The finding of the Commissioner Income Tax (Appeals) as also the appellate tribunal recorded on the value of the goodwill of the assessee company are without any material and perverse to say the least. That being so, we have no hesitation to hold that the judgment of the appellate tribunal limiting the quantum of goodwill suffers from perversity and, therefore, held to be bad in law. 25. In the result, we hold that the assessee company is entitled to claim goodwill and accordingly, the question of law is answered in favour of the assessee and against the revenue. 26. In so far as quantum of goodwill is concerned, for the reason already set out hereinabove, the tribunal will re-appreciate the contention of the assessee as well as of the department and determine the actual goodwill that the assessee company is entitled to in the facts and circumstances of the case keeping in mind the legal issues raised by the assessee company, based on the agreement and other relevant parameters that have been submitted before the department, and determine whether the claim of goodwill amount of Rs. 10 crores is justified. In the result, the assessee's appeal is allowed and for quantification, the matter is remanded back to the tribunal. The department's appeal on goodwill is rejected, however, on the quantum it stands remanded to the tribunal. Resultantly, the issue of quantification will be re-agitated before the tribunal on merits. 27. 10 crores is justified. In the result, the assessee's appeal is allowed and for quantification, the matter is remanded back to the tribunal. The department's appeal on goodwill is rejected, however, on the quantum it stands remanded to the tribunal. Resultantly, the issue of quantification will be re-agitated before the tribunal on merits. 27. The parties to appear before the appellate Tribunal on 25th June, 2018. 28. Both the appeals are disposed of accordingly.