The Assessee converted  proprietary concern into a Public Limited Company. On succession of business, assessee transferred all assets including self-generated goodwill and liabilities of proprietary concern and in consideration. The AO denied exemption u/s. 47(xiv) in respect of part of goodwill transferred by taking a view that said goodwill was never mentioned in books of proprietary concern and further opined that goodwill which was transferred was not covered by exemption u/s. 47(xiv).  CIT (A) deleted the addition. On appeal by the revenue the Tribunal held that the  assessee had a bona fide belief that since there was no value for self-generated goodwill in terms of S.55(2), allotment of shares for same pursuant to conversion of proprietary concern into public limited company would not be considered as transfer within meaning of S. 2(47). There was a genuine difference of opinion between assessee and AO in not allowing claim of exemption u/s. 47(xiv) and therefore explanation furnished by the assessee was not found to be false by the AO, hence deletion of penalty by the CIT (A) is held to be justified. (AY. 2009 – 2010)