Law:

Section:

Section 34(1)(c) of the Estate Duty Act, 1953 - Aggregation - Whether in exercising jurisdiction as court of reference High Court can declare section 34(1)(c) ultra vires - Held, no Section 5 of the Estate Duty Act, 1953 - Property passing on death - Whether the share of the deceased in the value of the goodwill of the firm in which deceased was partner as karta of his HUF was not includible in the principal value of the estate passing on the death of the deceased - Held, no FACTS The deceased during his lifetime was the karta of a HUP. As karta he was a partner in a firm. While ascertaining the value of the estate of the deceased, aggregation under section 34(1)(c) was made and a sum was added as goodwill of a firm in which deceased was a partner as karta of his HUP. The Gauhati Tribunal held that notwithstanding section 34(1) the value of the share of the lineal descendants of the deceased in the joint family property was not includible in the estate of the deceased for rate purposes, following the Madras High Court decision in V. Devaki Ammal v. ACED[1973] 91 ITR 24 . The Tribunal also held that the share of the deceased in the value of the goodwill of the firm in which deceased was partner as karta of the HUP was not includible in the principal value of the estate passing on the death of the deceased. HELD The Tribunal at Gauhati is not bound by the decision of the Madras High Court but the decision has a persuasive value. The Tribunal has not committed any error, if the Madras High Court's decision was followed by them. However, it is settled that the Tribunal or the High Court and for that matter even the Supreme Court cannot declare any provision ultra vires while exercising power under the Act. In exercising jurisdiction as a court of reference, this Court cannot declare any provision of the Act ultra vires. Therefore, this Court would not follow the decision of the Madras High Court and addition to the deceased's estate could not be deleted on the ground that section 34(1)(c) is ultra vires. Further, the goodwill of the firm was not includible in the principal value of the estate passing on the death of the deceased in view of the Madras High Court…

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