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Issues Involved:
1. Liability of Rs. 80,000 to estate duty under section 10 of the Estate Duty Act, 1953. 2. Existence of goodwill in the business of M/s. Mahabir Prasad Gopi Krishna. Issue-wise Detailed Analysis: 1. Liability of Rs. 80,000 to Estate Duty: The primary question was whether the sum of Rs. 80,000 was liable to estate duty as property deemed to pass on the death of the deceased under section 10 of the Estate Duty Act, 1953. The facts established that the deceased made cash gifts to his two sons, which were subsequently invested back into the proprietary firm, later converted into a partnership firm. Section 10 of the Act stipulates that property taken under any gift shall be deemed to pass on the donor's death if the bona fide possession and enjoyment of it were not immediately assumed by the donee and retained to the entire exclusion of the donor. The Supreme Court in George Da Costa v. Controller of Estate Duty clarified that both conditions of immediate assumption and retention to the exclusion of the donor are cumulative and must be satisfied. The Tribunal found that the gifted amounts were invested in the partnership firm where the donor was a partner until his death. Thus, the donees did not retain the gifted amounts to the exclusion of the donor. The Tribunal's decision was supported by precedents, including Munro's case and Chick's case, which differentiated between gifts shorn of partnership rights and absolute cash gifts subsequently invested in a partnership. Applying these principles, the Tribunal concluded that the possession and enjoyment of the gifted property were not retained by the donees to the exclusion of the deceased. Therefore, section 10 was applicable, and the sum of Rs. 80,000 was liable to estate duty. 2. Existence of Goodwill in the Business: The second question was whether the business of M/s. Mahabir Prasad Gopi Krishna had goodwill. The Tribunal determined that the business had goodwill based on several factors, including its location, service, standing, and honesty of those running it. The business was also a selling agent and stockist for prominent companies, enhancing its goodwill. The accountable person contended that the nature of the business in kirana goods negated the existence of goodwill. However, the Tribunal, referencing the Supreme Court decision in S. C. Cambatta and Co. (P.) Ltd. v. Commissioner of Excess Profits Tax, held that goodwill depends on various factors, and the business in question had sufficient attributes to possess goodwill. The Tribunal valued the goodwill at Rs. 10,000, with the deceased's one-third share included in the estate. The accountable person's reliance on cases like Controller of Estate Duty v. Shri Ved Parkash Jain and Smt. Mrudula Nareshchandra v. Controller of Estate Duty was found inapplicable, as there was no stipulation that the partnership would not dissolve upon the deceased's death, nor was there evidence that the partnership continued post-death. Thus, the Tribunal's finding that the business had goodwill was upheld, and the second question was answered in favor of the revenue. Conclusion: Both questions were answered in favor of the revenue and against the accountable person, affirming the liability of Rs. 80,000 to estate duty and the existence of goodwill in the business of M/s. Mahabir Prasad Gopi Krishna.
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