CONTROLLER OF ESTATE DUTY Vs. DAULAL KANHAYALAL LATE

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal has referred the following two question to this court under section 64 of the Estate Duty Act, 1953 :

(2.) DAULAL Kanaiyalal died on August 8, 1975. Apart being a member of a Hindu undivided family and the Hindu undivided family being a partner in two firms, he was a partner in his individual capacity in the firm of Messrs. Ashokkumar. The accountable person had raised various contentions before the Assistant Controller and one of them was that, in view of the clause in the partnership deed of Messrs. Ashokkumar Mukeshkumar to the effect that, in the case of goodwill, if attached to the firm at any time, thee same shall be the property of the firm and no party to the deed shall have any right, title or lien over it, it could not be said that any share in the goodwill belonging to the deceased passed on his death. The Assistant Controller was of the view that the interest of a partner in a partnership firm is property and, therefore, it does pass on the death of that partner. His interest was, therefore, required to be valued in the computation of the principal value of the estate of the deceased and, accordingly, he estimated the share of the in the goodwill at Rs. 30,600.

(3.) IN further to the Tribunal, the assessee's contention that the deceased, at the time of his death, had no share in the goodwill of Messrs. Ashokkumar Mukeshkumar was accepted. The Tribunal was of the view that, in view of the said clause in partnership deed, it had to be held that no party to the deed had any right, title or lien over the goodwill either on retirement or even at the time of death.