CONTROLLER OF ESTATE DUTY Vs. NIRMALA BHANDARI

JUDGEMENT

(1.) At the instance of Revenue, following question has been referred for opinion of this Court under Section 64(1) of the Estate Duty Act, 1954 (in short 'Act') by the Income-tax Appellate Tribunal Delhi (in short Tribunal'):-

(2.) Factual position essentially is as follows: Shri Kishan Lal Bhandari (hereinafter referred to as 'deceased') was partner in the firm M/s. Sita Ram Khairati Lal. He died on 17/09/1978. He had 44% share in the profit of the partnership firm, which carried on business of commission agency in shop No. B-176, New Subzi Mandi, Delhi. Assistant Collector of Estate Duty (hereinafter referred to as 'Assessing Authority'), while computing estate duty payable, determined the value of the goodwill of the partnership at Rs. 3, 90, 579.00. and held that the goodwill exclusively belonged to the deceased and therefore passed on his death to his legal representatives. On appeal, however, the Appellate Controller determined the value of the goodwill at Rs. 1,30,193.00 and upheld the addition to that extent. Matter was carried in appeal by the accountable person before the Tribunal. It was contended that the addition on account of goodwill should be in proportion to the profit sharing ratio of the deceased. Tribunal accepted the contention. On being moved, question as set out above, has been referred for opinion of this Court.

(3.) We have heard learned counsel for the Revenue. There is no appearance on behalf of the accountable person. Learned counsel with reference to the decision of the Apex Court in Controller of Estate Duty Vs. Mrudula Nareshchandra (1986) 160 I.T.R. 342, submitted that the entire goodwill has to be taken into account and not in the ratio in which the deceased shared the profit/loss.