This is appeal by revenue against order of AAC dated 14-10- 1982. assessment year involved is 1979-80. first issue for our consideration in this appeal is whether AAC has erred in treating whole of consideration received by assessee on sale of machinery, furniture, fixture and stock-in-trade, etc., as goodwill and allowing same to be exempt. 2. relevant facts are that assessee has received sum of Rs. 1 lakhs as price of machinery, furniture, fittings, stock-in-trade, etc., along with goodwill of business, and claimed before ITO that assessee has received Rs. 1 lakh on account of goodwill of business, and, therefore, it is not taxable. ITO did not agree with claim of assessee. He has taken value of goodwill at Rs. 12,500 and estimated capital gains at Rs. 30,253. Being aggrieved, assessee carried matter before AAC. AAC has considered decisions of their Lordships of Supreme Court and High Court in CIT, Kerala v. West Coast Chemicals and Industries Ltd. [1962] 46 ITR 135, CIT (Central) Calcutta v. Mugneeram Bangur and Company [1963] 47 ITR 565 and held that assessee has sold business of running printing press known as Technical Printers.... as going concern together with machineries, furnitures, fittings, stock-in-trade and goodwill, but he allowed claim of assessee. According to him, amount received by assessee on sale of Technical Printers was not taxable. 3. Being aggrieved, revenue came in appeal before us. submission of learned departmental representative, Shri Joy was that in this case, there is transfer of business as whole and business is asset; therefore, whatever he received on account of transfer of business, balance of cost of acquisition and consideration received for business should be taxed as capital gains. 4. We have heard rival submission and considered material on record. fact is not in dispute that assessee has received Rs. 1 lakh for transfer of business which includes assets in business. In our view business is asset and on sale of such assets, balance from consideration should be taxed as capital gains tax. learned counsel for assessee, Shri R. C. Desai, relied on decision of Calcutta High Court in case of CIT v. Mungeeram Bangur & Co. [1963] 47 ITR 565 which was confirmed by Supreme Court in CIT v. Mungeeram Bangur & Co, [1965] 57 ITR 299. We have gone through decisions cited by Shri Desai. facts before their Lordships of Supreme Court in case of Mungeeram Bangur & Co. (supra) was that firm which carried on business of buying land, developing it and then selling it, under agreement; assessee sold business as going concern with its goodwill and all stock-in-trade to company promoted by partners. issue was whether by sale of whole business concern, it could be held that there was taxable profits in sum of Rs. 2,50,000. Their Lordships of Supreme Court held that sale was sale of whole concern and no part of price was attributable to cost of land and no part of price was taxable. fact that in schedule to agreement, price of land was stated did not lead to conclusion that part of sale price was attributable to land sold. What was given in schedule was cost price of land as it stood in books of vendor and if sum of Rs. 2,50,000 attributed to goodwill should be added to case of land, there was nothing to show that this represents market value of land considering value taken by their Lordships of Supreme Court in Mungeeram Bangur & Co.'s case (supra). We are of view, when business as whole is sold, it is difficult to give particular value to any item of business unless there is sufficient evidence to exact value of that particular item in business assets. In this case of assessee, assessee has claimed entire consideration as price for goodwill. We do not agree with claim of assessee. AAC has wrongly followed decision of Supreme Court. In fact, when there is sale of business as whole, capital gain can be taxed. In this case of assessee, already goodwill is estimated by ITO in last paragraph of his order, i.e., more than sufficient value of goodwill. Therefore, we uphold order of ITO on this aspect and reverse order of AAC. 5. last issue for our consideration in this appeal is whether AAC h s erred in directing ITO to exempt depreciation obtained by assessee in earlier years although it is clearly covered by provisions of section 41(2) of Act. 6. relevant facts are that assessee had started business of Technical Printers during 1967 and had incurred Rs. 27,589 towards purchase of price of total assets of business. assessee had made additions of Rs. 6,063 to assets during 1968-69 to 1970-71. Total depreciation allowed during year up to date was Rs. 23,595. During previous year relevant to assessment year 1979-80 assessee had sold business of Technical Printers for total consideration of Rs. 1 lakh. ITO has charged profits on sale of his business which includes machinery and applied sub-section (2) of section 41. 7. We heard rival submissions and considered material on record. Sub-section (2) of section 41 provides that where any building, machinery, plant or furniture which is owned by assessee and which was or has been used for purposes of business or profession is sold, discarded, demolished or destroyed and moneys payable in respect of such building, machinery, plant or furniture, as case may be, together with amount of scrap value, if any, exceed written down value, so much of excess as does not exceed difference between actual cost and written down value shall be chargeable to income-tax as income of business or profession of previous year in which moneys payable for building, machinery or furniture became due. In our view, considering provisions of section 41(2), when assessee was allowed written down value, while computing capital gains, depreciation which was allowed should be taken into account, and ITO has rightly applied provisions of section 41(2). Therefore, we restore order of ITO and reverse order of AAC. 8. appeal is allowed. *** ADDITIONAL INCOME TAX OFFICER v. M.B. RAKHE