Law:

Section:

Section 5 of the Estate Duty Act, 1953 - Property passing on death - Whether goodwill of business is an asset value of which can be included in dutiable estate of deceased - Held, yes Section 34 of the Estate Duty Act, 1953 - Aggregation of estate - Whether it was not open to accountable person to challenge constitutional validity of section 34(1)(c) or any provision of Act in proceedings arising under Act before authorities constituted under Act - Held, yes FACTS The deceased had a one-half share in the joint family business. Since the deceased died on 19-8-1961, the Assistant Controller held that the computation of the estate duty had to be made under section 34(1)(c). In computing the value of the deceased's share in the commission business, the Assistant Controller added Rs. 10,000 as the value of the deceased's one-half share in the goodwill of the commission business. On appeal, the Appellate Controller upheld that the value of the goodwill had to be included in the dutiable estate, but reduced the value of the deceased's one-half share to Rs. 8,250. Before the Appellate Controller, the accountable person contended that section 34(1)(c) was unconstitutional, being violative of article 14 of the Constitution of India. The Appellate Controller held that the estate duty computation had to be made under section 34(1)(c), since the Amending Act of 1958 had come into force from 1960, before the date of the death of the deceased. On appeal, the Tribunal held that the goodwill was an asset and confirmed the value determined at Rs. 8,250 by the Appellate Controller. On reference : HELD The goodwill of the commission business was an asset, value of half of which was to be included in the dutiable estate of the deceased. As regards, section 34(1)(c), it was not open to the accountable person to challenge the constitutional validity of any provision of the Act in proceedings arising under the Act before the authorities constituted under the Act. It was not the case of the accountable person that the case did not fall under section 34(1)(c). Therefore, the computation of estate duty under section 34(1)(c) was legal and valid. Note : The decision was in favour of the…

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