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Issues:
1. Valuation of open plot under the Gujarat Vacant Land in Urban Areas (Prohibition of Alienation) Act, 1972. 2. Aggregation of properties under section 34(1)(c) of the Estate Duty Act. 3. Existence of goodwill in the business of the deceased's firms. 4. Deductibility of estate duty in computing the net principal value of the deceased's estate. Valuation of Open Plot: The case involved a dispute regarding the valuation of an open plot under the Gujarat Vacant Land in Urban Areas (Prohibition of Alienation) Act, 1972. The Tribunal held that the property's value should be determined based on a hypothetical sale in the open market, disregarding any restrictions imposed by the Act. This decision was supported by legal principles emphasizing the valuation of property as if it were sold in the open market, even in the presence of statutory restrictions. The court upheld this approach, citing relevant legal precedents and confirming that the plot's value should not be reduced due to the Act's restrictions. Aggregation of Properties: Regarding the aggregation of properties under section 34(1)(c) of the Estate Duty Act, the court relied on a previous decision to conclude that the interest of all lineal descendants in joint family or Hindu undivided family property should be combined to determine the dutiable estate. This aggregation principle was applied to levy estate duty at the applicable rates on the total principal value of the combined interests. The court affirmed this decision, aligning with established legal interpretations and settled principles. Existence of Goodwill in Firms: The issue of whether goodwill existed in the deceased's firms was also addressed. The Tribunal found that both firms had acquired goodwill based on their business activities, standing in the industry, and profitability. Despite the firms not being constituted as sole selling agencies, they were deemed to have acquired goodwill due to their business operations, longevity, and profitability. The court agreed with this finding, emphasizing that the firms had indeed acquired goodwill, as evidenced by the valuation of their shares in the goodwill. Deductibility of Estate Duty: Lastly, the question of deductibility of estate duty in computing the net principal value of the deceased's estate was considered. Citing relevant legal authorities, including a Supreme Court decision, the court ruled that estate duty payable on the estate passing on death is not deductible from the estate's value. This decision was based on established legal positions and previous judgments, leading to a conclusion that estate duty should not be subtracted when determining the net principal value of the deceased's estate. In conclusion, the court answered all four questions in the affirmative, ruling against the assessee and in favor of the Revenue. The judgment provided detailed analysis and legal reasoning for each issue, ensuring alignment with statutory provisions and established legal principles.
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