Estate duty treatment of partnership goodwill follows Supreme Court's settled interpretation, bringing the deceased partner's share within section 5.

A deceased partner's share in a firm's goodwill was examined for estate duty under section 5 of the Estate Duty Act, 1953. The Court noted that earlier conflicting High Court views on whether such goodwill passed on death had been resolved by the Supreme Court, whose binding interpretation favoured inclusion. Following that settled position, the reference was answered in the negative on the stated question, and the Tribunal's contrary view was not upheld. The goodwill share was therefore treated as falling within the scope of section 5 for estate duty purposes, with the result adverse to the accountable person and in favour of the Revenue.

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Issues: Whether the share of goodwill of a deceased partner in a firm passed on death within the meaning of section 5 of the Estate Duty Act, 1953.

Analysis: The only question referred concerned the estate duty treatment of the deceased partner's share in the goodwill of the firm. The issue had earlier produced conflicting views between High Courts, but the conflict had since been resolved by the Supreme Court, which reversed the contrary view and approved the reasoning that supported inclusion. In light of that binding resolution, the answer to the referred question had to follow the Supreme Court's pronouncement.

Conclusion: The question was answered in the negative, and the Tribunal's view was not upheld. The decision is in favour of the Revenue and against the accountable person.

Final Conclusion: The goodwill share was held to fall within the scope of section 5 for estate duty purposes, so the reference was decided against the accountable person.

Ratio Decidendi: Where the Supreme Court has settled a conflict of authority on the estate duty treatment of partnership goodwill, the reference court must follow that binding interpretation in determining whether the deceased's share passed on death.

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