CONTROLLER OF ESTATE DUTY Vs. BANSIDHAR SINGHAL

JUDGEMENT

(1.) BY this reference under Section 64 of the E.D. Act, 1953 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion:

(2.) SHRI Mukati, learned counsel for the Department, contended that on her retirement from, the partnership firm, the deceased was entitled to her share in the goodwill of the firm and as she had relinquished that share, there was disposition in favour of other partners and as no consideration had been paid for that disposition, the same amounted to gift. Reliance was placed on a decision of this court in Premchand Jain v. CED [1983] 144 ITR 41.

(3.) IN the instant case, it has not been found that, by virtue of the deed of retirement, all the assets of the firm including goodwill together with all the liabilities had been taken over by the continuing partners and the retiring partner had given up her share in the assets in view of the fact that she was discharged from the liabilities of the firm. Therefore, the decision in Urmila's case [1980] 122 ITR 958 (Bom), in so far as it refers to the share of the deceased in that case in the goodwill of M/s. Kantilal Manilal & Co. and M/s. Pannalal Bros., is distinguishable on facts. IN this case as the retiring partner had received her share in the other assets of the firm but had not received her share in the goodwill of the firm to which she was entitled, there was a relinquishment which amounted to a disposition. IN this connection we may usefully refer to the following observations of the Division Bench of this court in Premchand Jain's case [1983] 144 ITR 41 at p. 44: