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Issues:
- Whether the Asstt. CED correctly assessed the goodwill in the firm of M/s Subhash Lubricants passing on the death of the deceased. - Determination of the correct quantum of goodwill alleged to have passed on the death of the deceased. Analysis: Issue 1: Assessment of Goodwill The deceased, engaged in a dealership business, took his son as a partner, and the partnership dealt with products of Hindustan Petroleum Corporation Ltd. The Asstt. Controller assessed the value of goodwill surrendered to the son during the conversion of the proprietary business into a partnership. The Accountable Person contended that the dealership was dependent on an agreement with Hindustan Petroleum and no goodwill could attach to the dealer as the distributor was merely an agent of the principal company. The Controller upheld an addition for goodwill, stating that the firm held a valuable agency of Hindustan Petroleum, and the goodwill passed to the surviving partner. However, the Tribunal found that on the death of the deceased, the partnership ended, and the dealership agreement lapsed. As a new partnership was formed with a fresh agreement, the goodwill did not pass to the legal heirs or the surviving partner. The Tribunal disagreed with the Controller, stating that goodwill ended with the partnership and dealership termination, thus deleting the addition of Rs. 52,195. Issue 2: Quantum of Goodwill As the Tribunal found that the goodwill did not pass on the death of the deceased, it refrained from addressing the issue of determining the quantum of goodwill to be added. Since the finding on the passing of goodwill was sufficient to dispose of the appeal, the Tribunal did not delve into the quantum of goodwill. In conclusion, the Tribunal allowed the appeal of the Accountable Person, vacating the Controller's finding and deleting the addition of Rs. 52,195.
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