Sabyasachi Mukharji, J. - (1.) This is an appeal by certificate granted by the High Court of Gujarat by its order dated 2nd May, 1974 from the judgment and order dated 28th June, 1973 in Estate Duty Reference No. 3 of 1970 under section 65(1) of the Estate Duty Act, 1953 (hereinafter called the 'Act').
(2.) One Nareshchandra Kantilal died on 13th September, 1962. He was a partner in the firm of Messrs. G. Bhagwati prasad and Co. having 28% share in the partnership. The partnership was by the document of partnership which is dated 6th June, 1957. On the death of the deceased, 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 the firm in which he was a partner 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 clause (10) of the partnership deed. Clause (10) was as follows: "The firm shall not stand dissolved on death of any of the partners and the partner dyingshall have no right whatever in the goodwill of the firm".
(3.) The accountable person contended on the basis of this clause that on the death of the deceased, his heirs had no right in the goodwill of the firm, and as such the value of the said goodwill did not pass under the provisions of the Act and was, therefore, not liable to any estate duty. The Assistant Controller, however, negatived the said contention. He valued the goodwill at Rs. 2,16,900/-. The share of the deceased in the goodwill was worked out from this value at Rs. 60,732/-. The Assistant Controller also worked out the value of the interest which the deceased had in the partnership assets and added to the above referred amount of Rs. 60,732/- as the value of his share in the goodwill.;