Partnership goodwill remains an estate asset on death, and a deed clause cannot exclude the deceased partner's interest.

Goodwill of a running partnership is an asset in which each partner has an interest for estate duty purposes, even though no partner has a specific share in any particular asset while the firm continues. A deed clause denying right, title or lien over goodwill did not exclude the deceased partner's interest in that asset. The earlier view that a dying partner's interest in goodwill automatically ceased was displaced by the Supreme Court's position that goodwill remains a firm asset and passes on death. The deceased's share in goodwill was therefore includible in the estate.

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Issues: Whether the deceased had any share in the goodwill of the partnership firm and, if so, whether its value was includible in the estate.

Analysis: The goodwill of a running partnership is an asset in which every partner has an interest, though no partner can claim a specific share in any particular asset during the subsistence of the firm. A clause in the partnership deed denying right, title or lien over goodwill did not negate the partner's interest in that asset for estate duty purposes. The earlier view that a dying partner's interest in goodwill automatically came to an end was no longer good law in view of the Supreme Court's ruling that goodwill survives as a firm asset and passes on death.

Conclusion: The deceased had a share in the goodwill, and its value was includible in the estate; the answer is in the affirmative, in favour of the Revenue.

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