Partnership goodwill includible in full in deceased partner's estate for estate duty purposes.

Goodwill of a partnership business was treated as part of the deceased partner's estate for estate duty purposes because the partner's interest extended to the firm's assets, including goodwill, and the partnership deed made the goodwill the deceased's sole and exclusive property on dissolution. The Estate Duty Act, 1955 was applied on the basis that persons accountable are liable for property passing on death, subject to the statutory limitation linked to assets actually received or receivable. Goodwill was not excluded merely because the deceased had no specific share in each asset. The entire goodwill was therefore includible in the estate.

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Issues: Whether the goodwill of the partnership business had to be included in full in the estate of the deceased for estate duty purposes, or only in proportion to the deceased partner's profit-sharing ratio.

Analysis: The deceased partner's interest in a running partnership extended to the firm's assets, including goodwill. The partnership deed expressly treated the goodwill as the deceased's sole and exclusive property on dissolution, and the statutory scheme under the Estate Duty Act, 1955 treated persons accountable for estate duty as liable for the property passing on death, subject to the statutory limitation tied to the assets actually received or receivable. On the reasoning accepted from the earlier authority, goodwill did not stand excluded merely because the deceased's interest in the partnership was not a specific share in each asset.

Conclusion: The entire goodwill was required to be included in the estate of the deceased, and the question was answered in the negative, in favour of the Revenue.

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