CONTROLLER OF ESTATE DUTY Vs. NATHUMAL RAMCHAND

JUDGEMENT

(1.) The only question referred in this case under section 64(1) of the Estate Duty Act, 1953, is :

(2.) On the question at issue there was a conflict of opinion between the Gujarat High Court and the Madras High Court. The Gujarat High Court took the view in Mrudula Nareshchandra v. CED [1975] 100 ITR 297, that the goodwill does not pass on the death of a partner where the partnership deed provides that the partnership shall not be dissolved on such death and that the heirs of the deceased partner shall have no right what soever to claim any share in the goodwill of the firm. A contrary view was taken by the Madras High Court in CED v. Ibrahim Gulam Hussain Currimbhoy [1975] 100 ITR 320. The Tribunal chose to follow the Gujarat view as against the view taken by the Madras High Court and accordingly held in favour of the accountable person. Thereupon, the Department applied for and obtained the present reference.

(3.) Since the decision of the Tribunal, the Supreme Court has resolved the aforesaid conflict. The Supreme Court. in CED v. Mrudula Nareshchandra [1986] 160 ITR 3 reversed the judgment of the Gujarat High Court and has expressly approved the decision and the reasoning of the Madras High Court. Following the said decision of the Supreme Court, we answer the question referred to us in the negative, i.e., in favour of the Revenue and against the accountable person. No costs.