Law:

Section:

Section 5 of the Estate Duty Act, 1953 - Property passing on death - Deceased was a partner in a firm whose partnership deed was reconstituted such that deceased's major sons had become partners and his minor sons mere admitted to partnership - On death of deceased, exactor of estate of deceased as accountable person contended that clause 14 of partnership deed specifically disentitled retiring partner or legal representative of deceased partner for claiming any interest in goodwill of from and that, there was no passing of any interest in goodwill on death of deceased - Whether interest in goodwill which deceased possessed and could dispose of along with entire interest in firm at time of his death came to devour on serving partners and their share in interest of goodwill was augmented to extent of share of deceased as per clause 14 of partnership deed, and, therefore, there was in fact passing of property on death of deceased so as to attract section 5 - Held, yes FACTS Deceased A' was a partner till his death in the firm of AR which was originally constituted by a deed of partnership but subsequently reconstituted. The deceased's share in the partnership was 3 annas in the rupee in terms of the reconstituted partnership deed. The deceased had, gifted to his five sons, a sum of Rs. 10,000 each. Under the reconstituted partnership deed the deceased's major sons, had become partners and his three minor sons were admitted to the partnership. On the death of the deceased, the executor of the estate of the deceased as accountable person contended that clause 14 of the partnership deed specifically disentitled the retiring partner or the legal representative of the deceased partner for claiming any interest in the goodwill of the firm and that, therefore, there was no passing of any interest in the goodwill on the death of the deceased. The ACED negatived the said contention and held that the deceased was competent to dispose of his share in the partnership property in terms of section 6 of that the cesser of interest in terms of section 7 need not benefit the legal heirs of the deceased and that, therefore, the deceased's share in the goodwill of the firm could…

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