(1) THIS appeal by special leave is by the Revenue against rejection by the High court of its application made under Section 256(2 of the Income Tax Act, 1961 for requiring the reference of a question of law, said to arise out of the b tribunals order. The question is as under :

"WHETHER, in the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs. 35,000.00 received by the assessee towards goodwill on his retirement from the partnership is not liable to tax under the head capital gain?"

(2) IN COMMISSIONER OF INCOME TAX v B.C. Srinivasa Setty this court has held that the goodwill generated in a newly commenced business cannot be described as an asset within the terms of Section 45 and, therefore, its transfer is not subject to income tax under the head "capital gains". Following that decision this appeal must fail.

(3) CONSEQUENTLY the appeal is dismissed. No costs.