Dipak Kumar Sen, J. - (1.) The present reference, arises out of levy of estate duty on the estate of Shri Bastimal Mehta, who died on the 15th March, 1968. The accountable persons, Annaraj Mehta and Deoraj Mehta, are the sons of the deceased. The controversy is over the computation of the value of the 20% share of the deceased in a firm named "Ashok Foundry and Metal Works", as a partner. The partnership which commenced its business on and from the 1st January, 1967, was constituted by a deed dated the 30th December, 1966, and, inter alia, provided as follows : "(17) That on the death or the retirement of any partner, the partnership business shall not be dissolved but it shall continue to be carried on with or without the legal heirs or representatives of the deceased partner who may be taken into partnership in his place on such terms and conditions as may be determined by the parties concerned."
(2.) The Asst. CED computed the value of the deceased's share in the said firm by taking into account, separately, the balances credited to the deceased in the capital account and in the current account, 20% share in the provisions for liquidated damages and development reserve and, lastly. the deceased's share in the goodwill of the business. The goodwill of the firm was valued at Rs. 6 lakhs and that of the share of the deceased therein was calculated at 20% to be Rs. 1,20,000. The value of the deceased's share in the said firm calculated as aforesaid was included in his estate for purposes of estate duty.
(3.) Being aggrieved, the accountable persons preferred an appeal to the Appellate CED and contended, firstly, that the business did not have any goodwill, and further that the value of the goodwill, if any, was wrongly computed ignoring the figures of the total income as finally determined and taking into account interest only on the fixed capital at a low rate of 6%.;