BIKRAMJIT SINGH Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) ON an application filed by the petitioner (hereinafter described as the accountable person), the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, "the Tribunal"), referred the following question of law for the opinion of this court under Section 64(1) of the Estate Duty Act, 1953 (for short, "the Act") :

(2.) FOR the purpose of deciding the aforementioned question, we may notice the relevant facts. <PARA> Khanna and Hari Raj of which the late Shri Shiv Raj Singh (predecessor-in-interest of the accountable person) was a partner, was carrying on business as selling agent of vegetable products of M/s. I. V. P. Ltd. FOR this purpose, it had entered into an agreement with M/s. I. V. P. Ltd. some time in November, 1972. The same was renewed from time to time. The last renewal was made on September 24, 1980, was to last till October 31, 1987. The same was to remain effective up to October 31, 1987. Shri Shiv Raj Singh died on April 30, 1980, i.e., during the currency of the agreement. By an order dated August 20, 1981, the Assistant Controller of Estate Duty, Jalandhar (hereinafter described as "the A. C. E. D."), assessed the estate of the late Shri Shiv Raj Singh at Rs. 9,12,964 by including the value of his share in the goodwill of M/s. Khanna and Hari Raj. The appeal filed by the accountable person under Section 62(5) of the Act was partly allowed by the Appellate Controller of Estate Duty, Jalandhar (hereinafter described as "the Appellate Controller"). He upheld the decision of the A. C. E. D. that the firm, M/s. Khanna and Hari Raj, had a goodwill and the late Shri Shiv Raj Singh had the share in the same. He further held that the share of Shri Shiv Raj Singh in the goodwill of the firm could be legitimately counted for the purpose of estate duty. He, however, reduced the value of the share of the deceased in the goodwill from Rs. 3,36,155 to Rs. 1,10,000. The accountable person and the A. C. E. D. filed separate appeals against the order of the Appellate Controller, which were disposed of by the Tribunal by a common order dated October 23, 1986. The accountable person applied for rectification of the so-called error in the order of the Tribunal. His application was rejected by it vide order dated January 12, 1988.

(3.) DRN.L. Shardha, counsel for the respondent, argued that even though the orders passed by the Tribunal are not happily drafted, the finding of fact recorded by the A. C. E. D. and the Appellate Controller on the issue of goodwill of the firm--M/s. Khanna and Hari Raj, and the share of the late Shri Shiv Raj Singh in the value of the goodwill does not give rise to any question of law which may require determination under Section 64(1) of the Act. He referred to paragraph 5 of the order dated October 23, 1986, and submitted that after having affirmed the findings recorded by the Appellate Controller that M/s. Khanna and Hari Raj had the goodwill, there was no occasion for the Tribunal to make observations in paragraphs 7 and 14 of the said order suggesting that counsel for the accountable person had not challenged the finding on the issue of goodwill of the firm or to make an observation in para. 4 of the order dated January 12, 1988, that existence of goodwill is prima facie established.