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TMI Blog1980 (9) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of the HUF. Such entries were made on the representation of the deceased that he was impressing the aforesaid amounts with the character of joint family property. The aforesaid amounts remained in the books of the firm till the deceased died on 17th May, 1972. 3. On 6th Oct., 1969 the deceased gifted Rs. 10,000 to his son Makesh Kumar Mardia. This was carried out by debiting his personal account in the books of the aforesaid firm and crediting the account of the donee in the books of the said firm. Similarly on 30th Sept., 1968 the deceased gifted Rs. 2,000 to his daughter-in-law Saroja Bai and Rs. 1,000 to his grand daughter Meerabai and such gifts were also made debiting the personal account of the deceased in the books of the firm and crediting the accounts of the donee. 4. Sri Roopchand Mardia another son of the deceased filed an ED account disclosing the principal value of the estate as Rs. 74,317. In so doing the did not include the value of the goodwill of the deceased in the aforesaid firm. The Asstt. CED computed the value of the share of the deceased in the goodwill which was 16 per cent as Rs. 4,000. This was done by taking the average income of the firm for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Undoubtedly the firm had been in existence carrying on business for the last 25 to 30 years at Godown Street, Madras, which is a very important commercial locality. In these circumstances it is futile to contend that the firm did not have any goodwill. The mere fact that it was trading in groceries does not necessarily lead to the conclusion that there was no goodwill. By reason of its having carried on business for a long number of years in a very important locality, the firm should necessarily have earned some goodwill. 8. It was next urged on behalf of the accountable person that the value of the goodwill has not been propertly computed. It was urged that interest should be allowed at 12 per cent on the average capital employed and that remuneration to partners should have been allowed at Rs. 1,000 p.m. It was pointed out that if the value of the goodwill is computed on the above basis, it would result in a deficit of Rs. 17,994. A statement giving working was also placed before us. It was argued that unless there was super profits, there would be no goodwill at all. Here again we are unable to accept the contention. When once it us held that the firm had goodwill, we fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ED Act. He urged that when the deceased impressed these properties with joint family character, his sons became entitled to the same and could have enforced partition thereof. According to him, there was thus extinguishment of right of the deceased in the said sum of Rs. 30,000 and hence, it was a disposition under Expln. 2 to s. 2(15) of the ED Act and since it was a disposition in favour of the relatives, it should be deemed to be a gift and hence, s. 10 became attracted. In support of this contention he relied strongly on the decision of the Supreme Court in CED vs. Kantilal Trikamlal (1976 CTR (SC) 391 : (1976) 105 ITR 92 (SC), where it was held that an unequal division of joint family properties would amount to a disposition under Expln. 2 to s. 2(15) of the ED Act. 11. The question as the whether the transaction by the a Hindu coparcener throws his properties in the family hotchpot would amount to disposition u/Expl. 2 to s. 2(15) of the ED Act was considered by the Madras High Court in A.N.K. Rajamani Ammal vs. CED (1972) 84 ITR 790 (Mad). There the deceased caused the publication to be made in two Tamil dailies to the effect that he had abandoned all his separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In view of the principle laid down in the above decision of the Madras High Court, it has to be held that Rs. 30,000 thrown into the common hotchpot by the deceased belong to the HUF of which he was Karta and that on the death of the deceased only his share therein to which he would have been entitled had there been a partition before his death had passed on his death under s. 7 of the ED Act. 13. Even assuming that the transaction by which the deceased had thrown Rs. 30,000 belonging to him into the family hotchpot amounted to a disposition under Expln. 2 to s. 2(15) of the ED Act, the question still to be considered is whether the provisions of s. 10 are attracted. In our opinion the provisions of s. 10 are attracted. In our opinion the provisions of s. 10 cannot be said to apply to such a transaction where an individual Hindu coparcener throws his separate properties in the family hotchpot or impresses them with joint family character. It is inherent from the very nature of the transaction that he would continue to be the owner of the properties so dealt with and such ownership would extend to the entirety of the properties. Indeed it is because of this that the Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Shri V. Balasubramanian, wherein it had been stated that s. 13 would cover the case of a Hindu coparcener throwing his separate property into the common hotchpot of the joint family. 16. We are unable to accept the above contention, s. 13 of the ED Act runs as follows: "Where a person, having been absolutely entitled to any property or to the funds with which any property was purchased, has caused it to be transferred to or vested in himself and any other person jointly, whether by disposition or otherwise, either by himself alone or in concert, or by arrangement with any other person so that the beneficial interest in some part of that property passes or accrues by survivorship on his death to the other person, the whole of that property shall be deemed to pass on his death." A reading of the above section will show that it applies only to a case where a person has caused his property to be vested in himself and any other person jointly so that on his death the beneficial interest survives the other. The question for consideration is whether a transaction by which a Hindu coparcener impresses his separate property with the character of joint family property satisfies the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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