CONTROLLER OF ESTATE DUTY Vs. MALHOTRA G H

JUDGEMENT

(1.) THIS is a reference on a case stated under s. 64(1) of the E. D. Act, 1953. the questions referred to us for our determination in this references are as follows :

(2.) IT is agreed between the learned counsel for he Revenue and the learned counsel for the assessee that as far as question No. (2) is concerned, the same is concluded in favour of the assessee by the decision of this court in Khatijabai Abdulla Soomar v. CED [1980] 1243 ITR 160. In view of this, we propose to set out the facts only in so far as they pertain to question No. (1).

(3.) WE propose to discuss the question of taxability of the share of the said decease in the goodwill of the said two firms separately. As far as the firm of M/s. Universal Dyeing and Printing Works is concerned, it is not disputed by Mr. Naik, learned counsel for the Revenue, that the share the said deceased had in the goodwill of that firm could not be treated as property which is deemed to pass under s. 6 of the E. d. ACt. this would naturally be so, because, apart from any other consideration, the said deceased did not have any share in the goodwill of that firm at the time of his death. as he had already retired prior to his death from that firm : and hence there was no question of his having any right to dispose of his share in the goodwill of that firm at the time of his death. What Mr. Naik sought to contained before us was that,. as held by the Assistant Controller of Estate Duty, sons no amount was paid to the said deceased on account of his share of the goodwill of that firm on his retirement, it must be regarded as a gift of the said share of goodwill to the continuing partners. The Assistant Controller had valued the share of the said deceased in. he goodwill of that firm at Rs. 90,000 and held that as the said deceased had not been paid any amount on account of that share, the case must be regarded as one where there said deceased had given a gift of his share in the goodwill of that firm to the continuing partners of that firm, and as the said decease died within two year of that gift, the said decease under, the provision of s. 9 of the E. D. Act,. In the first place, in our view, Mr. Naik is not entitled to urge this contention before use at all. There is no reference in the judgment of the Tribunal or in the statement of the case to any contention by the Revenue that the amount of Rs. 90,000 was liable to be included in the estate of the said deceased by reason of the provision of s. 9 of the E. D. Act. The judgment of the Tribunal nowhere considers whether it could be said that at the time of his retirement, the said deceased had made a gift of his share of the goodwill to the continuing partners of the firm. It is, on the other hand, quite clear that the only question argued before the Tribunal and discussed by the Tribunal was where the share of the said deceased in the goodwill of that firm valued at Rs. 90,000 must be deemed to pass on his death under the provision of s. 6. The question, therefore, whether this amount was liable to be include in the estate of the said deceased under the provision of s. 9 of the E. D. Act, does not arise out of the judgment of the Tribunal. Apart from this, there is nothing in the statement of the case to show that the said deceased was entitled, in law, to any amount on account of his share in the goodwill of the said firm, on the terms of the deed of partnership constituting the firm. For example, it is possible that there might have been a specific term in the said deed of partnership, providing that a retiring partners would not get any amount on account of his share in the goodwill. That question has not been investigated at all by the Tribunal and it would not be right for us to permit the learned counsel for the Revenue to agitate that question here.