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TMI Blog1973 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... a goodwill of the business. The usual rate of capitalisation in the case of ordinary retail customary business not very well established is two years' average profits. Therefore, there is no error in the valuation made by the Tribunal. Accordingly, question No. 1 is answered in the affirmative and against the accountable person - - - - - Dated:- 20-9-1973 - Judge(s) : G. K. GOVINDA BHAT., M. K. SRINIVASA IYENGAR. JUDGMENT The judgment of the court was delivered by GOVINDA BHAT C.J.-The Income-tax Appellate Tribunal, Bangalore Bench, has stated a case and referred the following question, of law under section 64(1) of the Estate Duty Act, 1953, hereinafter called " the Act " for the opinion of this court : "(1) Whether, on the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson that the aforesaid sum of Rs. 71,900 was not property passing on death under section 10 of the Act was rejected. That decision of the Appellate Controller was affirmed by the Appellate Tribunal. Aggrieved by the decision of the Appellate Tribunal, the accountable person has sought reference to this court on the above questions of law. The second question of law is concluded by the decisions of the Supreme Court in Controller of Estate Duty v. C. R. Ramachandra Gounder and Commissioner of Income-tax and Controller of Estate Duty v. N. R. Ramarathmam . In the latter case the facts were these : The deceased, his three sons and a daughter were partners in a firm which carried on money-lending business. On March 31, 1953, and April 1, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel that in view of our answer to question No. 2, question No. 3 need not be answered. Therefore, we decline to answer question No. 3. The only question that remains to be answered is question No. 1 regarding the inclusion of the value of the deceased's share of the goodwill of the firm. It was urged by the learned counsel for the accountable person that the firm was dealing in foodgrains oil, etc., and there was no material before the Tribunal to hold that the firm had established a goodwill of its business. In support of that contention, learned counsel relied on the decision of the Madras High Court in Seethalakshmi Ammal v. Controller of Estate Duty. It was observed in the said case: "Where a business involves no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y factors, viz., the persons carrying on the business, their conduct as to how the business is carried on and its situation. During the last three years sizeable profits have been made by the firm. The firm has established itself and we are of the view that there was a goodwill attached to the kind of business carried on by the assessee. The Appellate Controller of Estate Duty has directed that the goodwill should be valued at two years' purchase of the average profits. This we think is quite reasonable." On the material on record, it cannot be said that the Tribunal had no material to hold that there was a goodwill of the business. The usual rate of capitalisation in the case of ordinary retail customary business not very well establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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