9911796707
TMI Blog1980 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the Tribunal was right in holding that the sum of Rs. 18,000, being 2/5ths share of the goodwill referable to the share of the sons of the deceased in the partnership firm, could not be included in the estate of the deceased by invoking section 10 of the Estate Duty Act ? " The estate duty assessment, which has led to this reference, came to be made on the death of one S. M. Mohamed Ibrahim on 25th January, 1965. Till 1st November, 1957, he was carrying on a proprietary business in hardware under the name and style of M/s. S. M. Mohamed Ibrahim and Sons, Colombo. This was converted into a partnership concern on 1st November, 1957, by his admitting his two minor sons into the benefits of partnership. At that time, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not valid. The questions set out earlier arise out of this order of the Tribunal. Section 10 of the E.D. Act, in so far as it is material, runs as follows: " Property taken under any gift, whenever made, shall be deemed to pass on the donor's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise........" There are provisos to this provision, but they are not material for our present purpose. This provision has come up for consideration in a number of decisions some of which were rendered by the Supreme Court. The Supreme Court had occasion to consider the applicability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10 of the Act until and unless such enjoyment or benefit is clearly referable to the gift, i. e., to the parting with such enjoyment or benefit by the donee or permitting the donor to share them out of the bundle of rights gifted in the property. If the possession, enjoyment or benefit of the donor in the property is consistent with the other facts and circumstances of the case, other than those of the factum of gift, then it cannot be said that the donee had not retained the possession and enjoyment of the property to the entire exclusion of the donor or, to the entire exclusion of the donor in any benefit to him by contract or otherwise. It makes no difference whether the donee is a partner in the firm from before or is taken as such at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84,000 cannot be brought to tax in the light of the judgment of the Supreme Court in CED v. Kamlavati [1979] 120 ITR 456. As regards the second question which relates to goodwill we entertained some doubt as to whether there was any gift at all in a case of this kind. At the time of the formation of the partnership the persons were merely taken into the firm and in consequence of their rights as partners they enjoy the benefit of the goodwill. The factum of gift is itself open to doubt. However, it is unnecessary to go into this aspect as the position regarding the sum of Rs. 18,000 appears even otherwise to stand a fortiori. There is nothing referable to the gifts as far as the enjoyment of the goodwill is concerned. The enjoyment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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