Goodwill in partnership estate duty depends on deed terms; no inclusion where entitlement is limited to retiring partners.

Goodwill could not be added to the deceased partner's estate where the partnership deed restricted entitlement to goodwill to a retiring partner and contained no clause extending that right on death. On the facts found, no amount could be superimposed on the deceased partner's share as goodwill, and invocation of section 5 of the Estate Duty Act, 1953 was not justified. The addition towards goodwill was therefore unsustainable and was deleted in favour of the accountable person.

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Issues: Whether the value of goodwill of the firm could be included in the principal estate of the deceased for estate duty purposes.

Analysis: The partnership deed contained a specific clause dealing with goodwill and confined entitlement to goodwill to a retiring partner. In the absence of any clause extending that entitlement to the death of a partner, no amount could be superimposed as goodwill on the deceased partner's share. The invocation of section 5 of the Estate Duty Act, 1953 was therefore not justified on the facts found.

Conclusion: The addition of Rs. 26,000 towards goodwill was unsustainable and was deleted, in favour of the accountable person.

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