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Issues Involved:
1. Calculation of the value of goodwill for estate duty purposes. 2. Inclusion of the sales tax refund amount in the estate of the deceased. Issue-wise Detailed Analysis: 1. Calculation of the value of goodwill for estate duty purposes: The court examined whether the Tribunal was correct in determining the share of goodwill of the deceased based on two years' purchase of super profits instead of three years. The Assistant Controller of Estate Duty initially valued the goodwill by calculating three years' super profits, deducting interest on capital and notional salaries, and rounded the figure to Rs. 2,00,000. The Zonal Appellate Controller upheld this valuation method but excluded the sales tax refund amount from the calculation of goodwill. The Tribunal, however, revised the calculation to two years' purchase of super profits, allowing interest at twelve percent and partner remuneration at Rs. 12,000 per annum, and deemed this fair and reasonable. The court referenced several cases to determine whether the method of calculating goodwill is a question of law or fact. It cited Jogta Coal Co. Ltd. v. Commissioner of Income-tax, S. C. Cambatta & Co. Pvt. Ltd. v. Commissioner of Excess Profits Tax, R. Ranganayaki Ammal v. Controller of Estate Duty, and Commissioner of Income-tax v. K. Rathnam Nadar, concluding that the mode of assessing goodwill is a mixed question of law and fact. Therefore, the Tribunal's decision on this matter should be referred to the High Court for an answer under section 64(3) of the Act. 2. Inclusion of the sales tax refund amount in the estate of the deceased: The court analyzed whether the Tribunal was right in excluding Rs. 29,322 from the estate of the deceased, which was part of a sales tax refund credited to the partnership firm. The Assistant Controller included the entire refund amount in the estate, but the Tribunal held that since the partnership firm took over the deceased's business assets and liabilities, one-fourth of the refund amount belonged to the other partner, Purshottamdas Patel. Consequently, the Tribunal deleted Rs. 29,322 from the deceased's estate. The court addressed the department's contention that the Tribunal's finding lacked evidence and whether the provisions of section 10 of the Estate Duty Act applied. The court noted that the department did not raise the issue of lack of evidence before the Tribunal in its application under section 64(1) of the Act. Citing Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd., the court held that a question of law not raised before the Tribunal cannot be considered arising out of its order. Therefore, the court refused to refer the first part of the second question. Regarding the applicability of section 10 of the Estate Duty Act, the court observed that the Tribunal noted this section was not discussed during the appeal. The court found no basis to conclude that the taking over of assets and liabilities amounted to a transfer or gift under section 10. Thus, the second part of the second question also did not arise from the Tribunal's order. Conclusion: The court directed the Tribunal to refer the following question to the High Court for an answer under section 64(3) of the Act: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the share of goodwill of the deceased may be arrived at on the basis of two years' purchase of super profits in the place of three years as fair and reasonable without assigning any reason?" There was no order as to costs.
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