AMEER G Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The reference has been made to this Court of the following three questions under S.54 of the Estate Duty Act:

(2.) One Gulam Moideen died on 2-9-1972. He was a partner of the firm M/s. Pulavar Shoe Mart. This firm was constituted under the deed of partnership, which is annexure A in the case. It was carrying on the business of manufacture and sale of aluminium vessels. Besides Gulam Moideen there were two other partners, they being his brother and son. They were only working partners who brought in no capital of their own. The deceased was entitled to 40 per cent share and the other two partners 30 percent each. Clause.15 of deed of partnership provided that in the event of any change in the constitution of the firm of its dissolution, parties 2 and 3 who were working partners would be entitled only to the amounts standing to their respective credit in the books of the firm and they shall not be entitled to any share in the goodwill or trade mark.

(3.) In making the original assessment to estate duty of the estate of Gulam Moideen under S.58(3) of the Estate Duty Act, the principal value of the estate was taken as Rs. 2,19,897/-. In determining this amount 40 per cent of the goodwill valued at Rs. 8,000/- was shown as the share of the goodwill to be taken for the purpose of assessment to estate duty. Subsequently there was an audit and the audit party pointed out that in view of Clause.15 of the partnership deed the entire goodwill of the business belonged to the deceased. Thereupon the Assistant Controller reopened the assessment under S.59(b) of the Estate Duty Act. He directed the inclusion of the full value of the goodwill in the assets liable to estate duty. The value of the estate was determined as Rs. 2,40,997/-.