CONTROLLER OF ESTATE DUTY Vs. KANTA DEVI TANEJA

JUDGEMENT

(1.) THESE two cases are referred under S. 64(1) of the ED Act, 1953 (hereinafter called "the Act") by the Tribunal, Gauhati Bench (for short, "the Tribunal"). As in both the cases the following identical question of law has been referred for the opinion of this Court, they are dealt with together. The question of law is:

(2.) THE broad facts are that Ram Rang Taneja of Gauhati died in a car accident on 8th Aug.,1971. At the time of his death, he held 50per cent share in the partnership of M/s Taneja & Co., Machkhowa, Gauhati, which derived income from commission an sale of confectionery goods. This firm was constituted of two partners, namely, Sri Ram Rang Taneja, the deceased, and his brother, Naubat Ram Taneja. The latter died on 14th June, 1971. After his death, his wife, Mst. Lakshmi Devi Taneja, joined the firm. At the time of the death of Ram Rang Taneja, there were two partners, namely, Mst. Laxmi Devi Taneja, widow of Naubat Ram Taneja, and the deceased, Ram Rang Taneja. Since the deceased's share in the said firm passed on his death under S. 5 of the Act, the EDO (Asst. CED) not only included the capital standing to the account of the deceased in his estate but also the valuation of the goodwill attributable to his share in the firm. The value of the entire goodwill of the firm was estimated at Rs. 36,500 and half share thereof at Rs. 18,250 was included in the estate.

(3.) THE Tribunal held that the principle laid down by the Privy Council in the case relied upon on behalf of the Department had no application to the case in hand, inasmuch as Perpetual Executors & Trustees Association of Australia Ltd. vs. Commissioner of Taxes (1954) 25 ITR (Suppl) 47 turned on the provisions of law which were different from those of the Indian Act. The Tribunal further held that there was nothing in the decision in Ranganayaki Ammal vs. CED (1973) 88 ITR 386 (Mad) to support the contention of the appellant as in that case the deceased was a member of an HUF. So far as the decision, relied upon by the Department, in T. R. Narayanaswami Naidu vs. CED (supra) was concerned, the Tribunal expressed the opinion that the said decision did present some difficulty wherein it was held that the Tribunal was not right in holding that the value of the share of the goodwill was not includible in the estate of the deceased that passed on his death. However, the Tribunal disposed of the cases of the accountable persons by paras. 8 and 9 of the order which read: