Estate duty on coparcenary share and professional goodwill turns on notional partition and firm reputation, not personal skill alone.

For estate duty, a deceased Hindu coparcener's interest in Mitakshara property was taken at the full share that arose on notional partition, because a widow's claim under section 6 of the Hindu Succession Act, 1956 did not further reduce that interest where the coparcenary consisted only of the deceased and his brother. The analysis also states that a professional firm may have goodwill if its name and reputation attract durable custom independent of individual partners, and such goodwill can pass on a partner's death. On the facts stated, the deceased's coparcenary interest and share in goodwill were includible in the estate.

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Issues: (i) Whether, for estate duty purposes, the deceased's interest in Mitakshara coparcenary property was to be taken as the full half share or only fifty per cent of that half share by reason of the widow's claim on a notional partition. (ii) Whether a professional firm could possess goodwill capable of passing on the death of a partner.

Issue (i): Whether, for estate duty purposes, the deceased's interest in Mitakshara coparcenary property was to be taken as the full half share or only fifty per cent of that half share by reason of the widow's claim on a notional partition.

Analysis: Section 6 of the Hindu Succession Act, 1956 brings about devolution by succession where a male Hindu dies leaving a Class I female heir, but it does not alter the rules governing partition or enlarge the widow's entitlement in a coparcenary consisting only of the deceased and his brother. On a notional partition immediately before death, the deceased would have taken his share as between the two coparceners, after which he became the sole surviving coparcener in relation to that share. In such a situation there is no further partition to which the widow can be allotted a share against that sole coparcenary interest.

Conclusion: The entire interest of the deceased in the coparcenary property was includible in the estate and the issue was answered in favour of the Revenue.

Issue (ii): Whether a professional firm could possess goodwill capable of passing on the death of a partner.

Analysis: Goodwill is the advantage of reputation and connection that attracts custom, and whether such goodwill exists in a professional firm depends on the facts of each case. A firm of professionals is not, as a matter of law, either incapable of having goodwill or automatically entitled to it. If the firm name has acquired durable market attraction independent of the individual partners, goodwill may exist and be valued; if the business depends only on personal skill and name, it may not. On the facts found, the firm had acquired reputation in its own name and the Tribunal's finding on existence of goodwill called for no interference.

Conclusion: The firm had goodwill and the deceased's share in that goodwill passed on death; the issue was answered in favour of the Revenue.

Final Conclusion: Both referred questions were decided against the accountable person, and the estate duty inclusion was upheld in full.

Ratio Decidendi: A widow's notional share on partition under section 6 of the Hindu Succession Act, 1956 does not reduce the deceased coparcener's full interest where the deceased and one brother constituted the coparcenary, and goodwill of a professional firm exists where the firm name, rather than merely the partners' personal skill, attracts durable custom.

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