Goodwill in deceased partner's estate excluded after retirement severed any surviving interest in the firm's goodwill.

A deceased partner's share in the firm's goodwill was held not includible in the dutiable estate where she had retired from the partnership shortly before death and the remaining partners had taken over the firm's assets and liabilities. On those facts, no separate enforceable right in goodwill survived for the estate, and retirement severed her interest in that asset. The prior view in similar matters was followed, and the proposed inclusion of goodwill in the estate was deleted.

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Issues: Whether the deceased partner's share of goodwill of the firm was liable to be included in the dutiable estate on her death after retirement from the firm.

Analysis: The deceased had retired from the partnership about two months before her death. The remaining partners had taken over the assets and liabilities of the firm, and the materials placed showed that no separate right in goodwill survived for inclusion in the estate. The prior view taken in similar matters was followed, on the basis that retirement from the firm had severed the deceased's interest in the goodwill and nothing passed on death on that account.

Conclusion: The inclusion of Rs. 29,000 towards goodwill in the dutiable estate was unjustified and was deleted, in favour of the assessee.

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