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TMI Blog1983 (7) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... tirement of the deceased lady from the partnership firm, M/s. Munnalal Pannalal & Sons, did not amount to relinquishment or abandonment of her share in the goodwill of the firm and that, as such, there was no gift of her share in the goodwill liable to duty within the meaning of section 9 of the Estate Duty Act, 1953 ? " The material facts giving rise to this reference briefly are as follows. Smt. Bhuribai expired on February 7, 1975. She was a partner in a firm which carried on business in the name and style of " M/s. Munnalal Pannalal & Sons, Ujjain ". She retired from the partnership on November 13, 1974. At the time of retirement, the deceased was not paid any amount on account of her interest in the goodwill of the firm. Therefore, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding the value of the goodwill from the net principal value of the estate of the deceased. The Tribunal, therefore, dismissed the appeal. Aggrieved by the order passed by the Tribunal, the Department sought reference and it is at the instance of the Department that the aforesaid question has been referred to this court for its opinion. Shri Mukati, learned counsel for the Department, contended that on her retirement from, the partnership firm, the deceased was entitled to her share in the goodwill of the firm and as she had relinquished that share, there was disposition in favour of other partners and as no consideration had been paid for that disposition, the same amounted to gift. Reliance was placed on a decision of this court in Pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (Bom), in so far as it refers to the share of the deceased in that case in the goodwill of M/s. Kantilal Manilal & Co. and M/s. Pannalal Bros., is distinguishable on facts. In this case as the retiring partner had received her share in the other assets of the firm but had not received her share in the goodwill of the firm to which she was entitled, there was a relinquishment which amounted to disposition. In this connection we may usefully refer to the following observations of the Division Bench of this court in Premchand Jain's case [1983] 144 ITR 41 at p. 44: "The next point to be considered is whether when the deceased did not receive her share in the goodwill at the time of retirement, did this result in a disposition in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatives as defined in s. 27(1) and as no consideration had been paid for this disposition, the same amounted to a gift. As the gift was made within two years from the date of the death, s. 9 applied to the gift and the property covered by the gift has to be deemed to have passed on the death of the deceased. In other words, the value of the share of the deceased in the goodwill of the partnership must be taken to be property passing on the death of the deceased. We respectfully agree with the aforesaid observations. In our opinion, therefore, on the facts and in the circumstances of the case, the Tribunal was not justified in holding that the retirement of the deceased from the partnership firm did not amount to relinquishment of her sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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