ISMAIL K Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The Income -tax Appellate Tribunal, Bangalore Bench, has stated a case and referred the following questions of law under Section 64(1) of the Estate Duty Act, 'l953, hereinafter called 'the Act', for the opinion of this court : '(1) Whether, on the facts and in the circumstances of the case, the inclusion of the share of goodwill at 2 years' purchase of average profits in M/s. Ismail Haji Suleman Sait, Hospet, as belonging to the deceased is valid in law ? (2) Whether, on the facts and circumstances of the case, the inclusion of Rs. 71,900 being the gifts (inclusive of interest) made by the deceased to his wife and five sons, by applying the provisions of Section 10 of the Estate Duty Act, 1953, is valid in law ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in not entertaining the additional ground raised by the assessee ?'

(2.) THE deceased, Suleman Sait, was a partner of a firm by name, M/s. Ismail Haji Suleman Sait, Hospet,' carrying on business in food -grains, oil, etc., in Hospet town. He died on first December, 1966. The Assistant Controller of Estate Duty determined the net principal value of the estate at Rs. 2,19,813. That amount included a sum of Rs. 13,860 which, according to the Assistant Controller, represented the deceased's 1/5th share of the goodwill value of the firm. It also included a sum of Rs. 71,900, which was the amount gifted by the deceased to his wife and children with interest thereon, which amounts were kept in the firm and utilised for the purposes of the business. On appeal preferred by the accountable person, the Appellate Controller valued the goodwill at two years' purchase of the average profits. The contention of the accountable person that the aforesaid sum of Rs. 71,900 was not property passing on death under Section 10 of the Act was rejected. That decision of the Appellate Controller was affirmed by the Appellate Tribunal. Aggrieved by the decision of the Appellate Tribunal, the accountable person has sought reference to this court on the above questions of law.

(3.) IT was submitted by the learned counsel that in view of our answer to question No. 2, question No. 3 need not be answered. Therefore, we decline to answer question No. 3.