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Issues:
1. Addition of Rs. 1,78,485 under section 9(1) read with section 27(1) of the Estate Duty Act. 2. Deemed gift under section 9(1) read with section 27, Explanation 2, to section 2(15) of the Act. 3. Deductibility of estate duty levied under section 5(2) of the Act in ascertaining the 'principal' amount for the purpose of the section. Analysis: Issue 1: The deceased relinquished his interest in the Hindu undivided family (HUF) business for a consideration of Rs. 1,75,000, leading to a dispute on the estate left by him. The Controller contended that this amounted to a partial partition, adding Rs. 1,78,485 to the estate. The Tribunal, however, excluded this amount, considering it a partial partition and not a deemed gift. Citing the Supreme Court's decision in CED v. Kantilal Trikamlal [1976] 105 ITR 92 (SC), the High Court ruled against the accountable person, upholding the Tribunal's decision to delete the addition of Rs. 1,78,485. Issue 2: The Tribunal referred the second question regarding the deceased not taking any share of goodwill on retirement, resulting in a deemed gift. However, as the accountable person did not appear or provide instructions, the High Court returned this question unanswered, directing the case back to the Tribunal for appropriate orders. Issue 3: Similarly, the third question regarding the deductibility of estate duty in ascertaining the 'principal' amount was also left unanswered due to the lack of representation by the accountable persons. The High Court directed the parties to bear their own costs, emphasizing the importance of legal representation in such matters. In conclusion, the High Court's judgment addressed the issues raised regarding estate duty, partial partition, and deemed gifts, emphasizing the need for legal representation and adherence to legal procedures in estate matters.
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