Law:

Section:

Section 5, read with section 9 of the Estate Duty Act, 1953 - Property passing on death - Whether where deceased continued to remain as a partner right up to his death, share of deceased in goodwill of firm was includible in principal value of property under section 5 - Held, yes - Whether where deceased retired from a firm as a partner before his death and deed of retirement contemplated that all assets of said firm including goodwill and outstandings together with all its liabilities would be taken over by continuing partners, share of deceased in goodwill of said firm was not required to be added to his estate for purpose of estate duty - Held, yes FACTS The deceased was a partner in three firms. The deceased, however, retired from the two firms before his death. In computing the principle value of the property left by the deceased, the ACED included the deceased's share in the goodwill of all the three firms. On second appeal, the Tribunal upheld the additions. On reference: HELD As regards then deceased's share in goodwill of firm in which he was partner till his death, it was seen that clause 13 of the partnership deed clearly contemplated devolution of the share of the deceased in all the assets including the goodwill on the continuing partners but providing that there was to be payment to the legal representatives for the share in the assets but excluding goodwill. This would clearly bring the case within the meaning of section 5. Thus, the share of the deceased in the goodwill of the firm was includible in the principle value of the property under section 5. As regards the other two firms the retirement deed provided that all the assets of the said firms including goodwill, rights, benefits and privileges and outstandings together with all its liabilities had been taken over by the continuing partners. Thus, if the retiring partners had given up his share in the assets, he had been relieved of his share in the liabilities. Similarly, if the continuing partners had secured the retiring partners' share in the assets, they had at the same time taken over the retiring partner's share of the liabilities. It was impossible to hold that the share of assets in…

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