9911796707
|
Home
Issues:
Whether the retirement of a deceased lady from a partnership firm amounts to relinquishment of her share in the goodwill of the firm and constitutes a gift liable to duty under the Estate Duty Act, 1953. Analysis: The case involved a reference under s. 64 of the Estate Duty Act, 1953, regarding the treatment of a deceased lady's retirement from a partnership firm in relation to her share in the goodwill of the firm. The deceased lady, a partner in the firm, retired without receiving any amount for her goodwill share. The Assistant Controller of Estate Duty included the value of the goodwill in her estate, but the Appellate Controller and the Tribunal disagreed, stating that her retirement did not involve a gift. The Department contended that the retirement constituted a gift as she relinquished her goodwill share without consideration, citing a relevant court decision. The accountable person argued that as the remaining partners took over all assets and liabilities, there was no goodwill share for the deceased. The court noted that unless specified otherwise in the partnership deed, a partner is entitled to goodwill value. In this case, the retiring partner did not receive her goodwill share, leading to a disposition. The court referenced previous decisions to support the view that the retirement did amount to relinquishment of her goodwill share, constituting a gift liable to duty under the Act. The court emphasized that the deceased partner did not receive her entitled goodwill share upon retirement, leading to a disposition in favor of other partners, constituting a gift under the Act. The court rejected the Tribunal's view, stating that the retirement did amount to relinquishment of her goodwill share, making it liable to duty. The court's decision favored the Revenue, holding that the retirement did involve a gift of the goodwill share within the meaning of the Estate Duty Act, 1953. The parties were directed to bear their own costs for the reference.
|
