TMI Blog2006 (3) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The judgment of the court was delivered by P.P.S. Janarthana Raja J.- The Income-tax Appellate Tribunal, Madras, "D" Bench, under the direction of this court order in T.C.P. No. 207 of 1993 dated March 1,1999, referred the matter under section 64(1) of the Estate Duty Act, 1953, at the instance of the assessee, for opinion of this court, raising the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 87,219 being alleged share of the deceased in the goodwill of the firm of N.P. Nataraja Nadar and Sons passed on the death of the deceased?" 'The facts leading to the above question of law are as under: One N.P.P. Nataraja Nadar pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led an appeal to the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal dismissed the appeal and held that the lower authorities were justified in bringing to charge the share of the deceased in the goodwill of the firm. Learned counsel appearing for the assessee submitted that the share of the said deceased in the goodwill of the firm was not exigible to estate duty and on the date of the death of the deceased, he was not a party to the partnership deed dated May 20, 1981, and hence section 9 is not applicable. He also relied on this court judgment in the case of CED v. S. Kuppuswami reported in [1981] 131 ITR 709. Learned counsel appearing for the Revenue submitted that in respect of the goodwill, the deceased surrendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 16, 1981, but no deed of retirement was drawn up. On May 20, 1981, the six sons of the deceased became partners and they shared equally 1/4th share, which earlier belonged to their father. The deceased was not a party to the later deed, hence there was no disposition made by the deceased in favour of his legal heirs to bring the case within the parameters of section 9. When there is no disposition made by the deceased, the authorities below were wrong in bringing the share value of the goodwill under section 9 of the Act. This court judgment in the case of CED v. S. Kuppuswami reported in [1981] 131 ITR 709, considered the scope of section 9 of the Estate Duty Act. In that case, one Mr. K. Subramania Iyer was a partner in the firm of T. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 9, 1969 came to be executed by the partners who constituted the firm from that date. The deceased was not a party to this partnership deed. Therefore, this document by itself cannot be taken to be a transaction or a disposition made by the deceased. The learned counsel for the Revenue, however, placed strong reliance on the recital in which it is stated that the deceased, due to old age and ailment, expressed his intention to retire from the partnership in favour of his sons, to which the other parties agreed. As the recital is part of a document to which the deceased was not a party, the learned counsel for the accountable person submitted that the deceased cannot be held responsible for the recital, and that if persons made such a rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest was gone on the 8th November." In the present case, there is no finding by the authorities below that there was disposition made by the deceased. Also there is no finding that at the time of retirement of the deceased, the said deceased had made a gift of the share of the goodwill to the continuing partners of the firm. Unless and until the factual finding is given that there was disposition made by the deceased in favour of his sons, the Revenue cannot invoke section 9. We also found that there is no reference in the order of the Tribunal or in the statement of the case that the amount of value of the goodwill of Rs. 87,219, is includible in the estate of the said deceased by reason of any other provision of the Estate Duty Act. F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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