T.T.MEHTA, J. - (1.)THE question involved in this reference is whether in cases where it is specifically stipulated between the partners of a firm that on the death of any of the partner, the partnership shall not stand dissolved and that the heirs of the deceased partners shall have no right whatsoever to claim any share in the good will of the firm, the property of the deceased partner in the goodwill of the firm passes on his death under the provisions of the Estate Duty Act, 1953, or not. The said Act is hereinafter referred to as 'the Act.'
(2.)SHORT facts of the case are that one Nareshchandra Kantilal died on 13th September 1962. He was a partners in the firm of Messrs. G. Bhagwatiprasad and Co. having 28% share in the partnership. This partnership came into existence by virtue of the document, exhibit A, which is dated 6th June, 1957. On the death of the deceased, the petitioner of this reference, who is the accountable person, filed necessary return under the Act. The Assistant Controller of Estate Duty, while valuing the estate of the deceased, came to the conclusion that the share of the deceased in the goodwill of th firm in which he was a partners was liable to be included in the principal value of his property. This inclusion was resisted by the accountable person on the ground that the question of adding the value of the share of the deceased in the goodwill of the firm did not arise in view of the stipulations contained in clause (10) of the partnership deed. The clause (10) is in the following terms :
'The firm shall not stand dissolved on death of any of the partners and the partner dying shall have no right whatsoever in the goodwill of the firm.'

Relying upon this clause, the accountable person contended that since on the death of the deceased, his heirs had no right in the goodwill of the firm, the value of the said goodwill did not pass under the provisions of the Act and was, therefore, not liable to any estate duty.

(3.)THE Assistant Controller, however, negatived the above contention of the accountable person and valued the goodwill at Rs. 2,16,900. He worked out the share of the deceased from the value at Rs. 60,732. He also worked out the value of the interest which the deceased had in the partnership assets and added to it the above referred amoutn of Rs. 60,732 as the value of his share in the goodwill.
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