Law:

Section:

Section 9 read with section 10 of the Estate Duty Act, 1953 – Gifts within a certain period before death – Deceased was partner in a firm – Firm was reconstituted by taking in new partners – Certain amount was transferred to two new partners by debiting capital account of deceased in firm and crediting accounts of said two partners – Whether deceased donor having died on 9-3-1966, section 9 that would apply would be with words ‘one year' and not with words ‘two years' – Held, yes – Whether since gifts in question were made more than one year before death of deceased they would fall outside scope of section 9 – Held, yes – Whether amount transferred by adjustment entries by deceased to two persons would not constitute property passing on death or deemed to pass on death under section 10 so as to be included in estate of deceased – Held, yes – Whether when Tribunal, on consideration of all relevant facts held that firm had no goodwill on date of death, no question of law arose from Tribunal's order – Held, yes FACTS S, was one of the three partners in a firm, carrying on retail business in the purchase and sale of textiles at Mayuram. The firm was reconstituted on 1-4-1964, by which the number of partners was increased from 3 to 8. The deceased transferred certain amount to two of the new partners on 1-10-1963 and 1-4-1964, by making adjustment entries in books of account of firm. After death of the deceased, the Assistant Controller took the view that the amount so transferred, formed part of the property passing on death and, therefore, assessable. He also held that the business had a goodwill and the value of the goodwill also formed part of the property passing on death. On appeal, the Tribunal held that neither the amount transferred nor the value of the goodwill would constitute property passing on death and, therefore, were not liable to be included for the purpose of estate duty. On reference: HELD Section 9 as originally enacted contained the words "two years" after the words "bona fide" made. However, by section 69 of the Finance Act, 1965, which section came into force on 1-4-1965, the words "one year" were substituted for the words "two years".…

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