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Issues:
1. Determination of deceased's share in the goodwill of a partnership firm. 2. Inclusion of the amount in the deceased's estate on account of the share in the goodwill. Analysis: The deceased was a partner in a firm and passed away, raising questions regarding his share in the goodwill of the partnership firm. The Assistant Controller valued the deceased's share in the goodwill at Rs. 30,600, considering a partner's interest as property that passes on death. The Appellate Controller upheld this view, emphasizing that a partner has a share in the firm's assets, including goodwill. However, the Tribunal accepted the contention that the deceased had no share in the goodwill based on a clause in the partnership deed. The Tribunal referred two questions to the High Court for consideration. The High Court analyzed the clause in the partnership deed, which stated that no partner had any right, title, or lien over the goodwill on retirement or death. The Tribunal's decision was based on this clause, but the High Court referred to a Supreme Court judgment that emphasized a dying partner's share in the goodwill passing on to the surviving partners or heirs. The Supreme Court clarified that the goodwill of a firm does not diminish on a partner's death, and whoever benefits from the partnership also benefits from the goodwill. The High Court noted that the partnership agreement did not prevent partners from receiving a share in the goodwill upon dissolution of the firm. The High Court concluded that the deceased did have a share in the goodwill of the firm, as established by the Supreme Court's ruling. The clause in the partnership deed did not negate the deceased's interest in the goodwill as a firm asset. Even though the arrangement among partners restricted the deceased from receiving his share in the goodwill during retirement or death, it did not eliminate his interest in the property. Therefore, the High Court answered the first question in the affirmative, affirming the deceased's share in the goodwill. However, the High Court declined to answer the second question, emphasizing the deceased's interest in the goodwill despite the partnership deed's restrictions.
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