COMMISSIONER OF INCOME TAX, BANGALORE ETC. ETC. vs B. C. SRINIVASA SETTY, ETC. ETC.

The Supreme Court held that the goodwill generated in a newly commenced business does not qualify as a capital asset under Section 45 of the Income Tax Act, 1961, and thus its transfer is not subject to capital gains tax. The Court affirmed that goodwill is intangible and varies with the nature of the business, being generated over time rather than existing at the outset. Consequently, the appeals regarding the taxability of goodwill transfer were dismissed, upholding the lower courts' decisions.