PCIT -21 Vs Remfry & Sagar (Delhi High Court)
Delhi High Court held that license fees paid to M/s. Remfry & Sagar for use goodwill vested in the company is allowable as deduction under section 37 of the Income Tax Act. Accordingly, appeal of the revenue dismissed.
Facts- A sole proprietorship came to be established in 1827 under the name of „Grant & Remfry‟ by a British immigrant, Mr. Henry Oliver Remfry. That sole proprietorship was subsequently converted into a partnership firm and was operated by five generations of the Remfry family upto the year 1957. In that year, four partners, Mr. Holloway, Mrs. Silverstone, Mr. Bernier and Mr. Burrington came to join ‘Remfry & Sons‟.
In 1973, Mr. Holloway and Mrs. Silverstone transferred the entire business of that partnership along with all the assets including the name and goodwill to Dr. V. Sagar. ‘Remfry & Sons‟ thus came to be acquired by Dr. V Sagar with effect from 01 April 1973 along with the goodwill that had been earned and acquired by that firm over the years. In 1990, Dr. V. Sagar is stated to have merged his sole proprietorship practice being run under the name of ‘Sagar & Co.‟ with ‘Remfry & Sons‟ and changed the name of the proprietorship to ‘Remfry and Sagar‟.
