TMI Blog1979 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ly deleting the addition of Rs. 40,000 ? " The estate duty assessment came to be made on the death of one Valliappa Chettiar on 3rd August, 1961. He was carrying on commission business in Jaggery and tamarind and trading business in yarn and cloth. For the purpose of estate duty assessment, the Asst. CED valued the goodwill of the business at Rs. 65,000 and included it in the principal value of the estate passing on the death of the deceased. The accountable person appealed and the Appellate CED held that looking to the criteria like location, the services, the honesty of those who run the business, reliability for quality, reputation of the business, etc., there was certainly goodwill for the business carried on by the deceased. He, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried on or the derivation of good profits are not relevant circumstances. He drew our attention to the decision of the Supreme Court in Rustom Cavasjee Cooper v. Union of India [1970] 40 Comp Cas 325. In that well-known case, which related to nationalisation of the banking companies, there is a passage at page 385 dealing with goodwill, which runs as follows: " Goodwill of a business is an intangible asset; it is the whole advantage of the reputation and connections formed with the customers together with the circumstances making the connection durable. It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years or in excess of normal amounts becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the deceased. " It was pointed out by this court that there was no material before the Tribunal to come to the conclusion that the product manufactured by the firm was somewhat uncommon and that it was difficult to say that customers would acquire it with facility from others. It was also observed that the extent of the profits alone could not establish the existence of the goodwill. The Tribunal had referred to the surrounding circumstances. But its order did not show what these surrounding circumstances were. It is on these facts that it was held that the Tribunal had no material to come to the conclusion that the firm had a goodwill and the question of evaluating the deceased's share of the goodwill did not, therefore, arise. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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