CONTROLLER OF ESTATE DUTY Vs. MURARILAL SOVASARIA

JUDGEMENT

(1.) THE origin of the instant proceedings is in the opinion or order of this Court passed on 11th Aug., 1988, in ED Ref. No. 1 of 1976 ( [1989] 175 ITR 417 (Gau)). As the reference was disposed of by that order, we call the instant proceedings as a supplemental order. In Reference No. 1 of 1976, two questions were referred to the Court. The instant proceedings related to the second question which pertained to the share of the goodwill of a partner of a dissolved firm, Ram Kumar Sovasaria. The goodwill was ascertained as Rs. 9,450 by the Revenue. The second question was whether Rs. 9,450 formed part of the estate of the deceased, Ram Kumar Sovasaria, in proceedings under the ED Act, 1953. That question was answered in favour of the accountable person on 11th Aug., 1988. The decision is reported in (supra) (CED vs. Murarilal Sovasaria). There was a clerical error in one of the sentences of the order. The relevant sentence reads as follows: "We are in agreement with the reasoning and conclusion reached by the Punjab and Haryana High Court in [1973] 90 ITR 400 (P&H) (S. Devaraj vs. CWT)." The Company Law Institute of India (P) Ltd., Madras, informed their reporter at Gauhati for onward transmission to this Court of their letter to the reporter. That letter sets out the error and reads as follows : "In the copy of the judgment received from you in CED vs. Murarilal Sovasaria, ED Ref. No. 1 of 1976 decided on 11th Aug., 1988, which has been published on page 417 of volume 175, Income Tax Reports, in the penultimate paragraph of judgment (Xerox copy of the relevant page is enclosed for your ready reference), on the question of includibility of the share of the value of goodwill in the principal value of the estate of the deceased, there appears to be some discrepancy. The above discrepancy lies in the fact that the decision follows the conclusion reached by the Madras High Court in the case of S. Devaraj vs. CWT [1973] 90 ITR 400 (Mad). But a reference to the Madras High Court decision will show that the said question has been answered against the assessee and in favour of the Revenue as may be seen from the concluding para in page 409 on the above question. Moreover, the above question of goodwill has already been decided in favour of the Department and against the assessee by the Supreme Court in its decision in CED vs. Mrudula Nareshchandra (1986) 58 CTR (SC) 74 : [1986] 160 ITR 342 (SC), in which the Madras High Court decision in CED vs. Ibrahim Gulam Hussain Currimbhoy [1975] 100 ITR 320 (Mad) was impliedly approved and which, in turn, relied on the above -cited Madras High Court decision in S. Devaraj vs. CWT (supra), referred to by the Gauhati High Court, in its decision. Under the circumstances, it would be highly appreciated, if the matter is brought to the notice of the honourable Judges for clarifying the correct position." We, at the inception, wish to express our gratitude to the Company Law Institute for pointing out our mistake. This Court, having read the letter, informed the Revenue and learned counsel for the accountable person on 6th June, 1989, and the two were invited for a debate on the following :