TaxTMI 
TaxTMI 
2006 (3) TMI 98
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....stances of the case, the Tribunal was justified in holding that the sum of Rs. 87,219 being alleged share of the deceased in the goodwill of the firm of N.P. Nataraja Nadar and Sons passed on the death of the deceased?" 'The facts leading to the above question of law are as under: One N.P.P. Nataraja Nadar passed away on May 16, 1981. During his life time, he was a partner in a firm called M/s. N.P. Ponnappa Nadar and Sons. The said firm was constituted on June 18, 1962 consisting of 4 partners, including the deceased. The deceased had 25 per cent, share in the profit or loss of the firm. The firm was engaged in purchase and sale of textile and handloom goods on wholesale and retail basis at Virudhunagar. The deceased was a partner in....
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....he was not a party to the partnership deed dated May 20, 1981, and hence section 9 is not applicable. He also relied on this court judgment in the case of CED v. S. Kuppuswami reported in [1981] 131 ITR 709. Learned counsel appearing for the Revenue submitted that in respect of the goodwill, the deceased surrendered the share and hence the lower authorities were justified in bringing the above share of the said deceased in the goodwill of the firm. We heard both the sides. In the present case, the authorities below included the share of the deceased in the goodwill of the firm under section 9 of the Estate Duty Act. Section 9 of the Estate Duty Act reads as follows: "(1) Property taken under a disposition made by the deceased purporti....
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.... authorities below were wrong in bringing the share value of the goodwill under section 9 of the Act. This court judgment in the case of CED v. S. Kuppuswami reported in [1981] 131 ITR 709, considered the scope of section 9 of the Estate Duty Act. In that case, one Mr. K. Subramania Iyer was a partner in the firm of T. Purushotham and Co., with 22 per cent. share. He retired on November 8,1969, and from the next day, the firm was reconstituted taking two major sons of the said K. Subramania Iyer as partners and also admitting the minor son to the benefit of partnership, each one of them having a 7 1/3 per cent, share in the firm. On the death of the said K. Subramania Iyer on November 17, 1969, the net asset of the firm was valued and 22 pe....
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....ion to retire from the partnership in favour of his sons, to which the other parties agreed. As the recital is part of a document to which the deceased was not a party, the learned counsel for the accountable person submitted that the deceased cannot be held responsible for the recital, and that if persons made such a recital for their own purposes, that would not have any consequence as far as the deceased was concerned. Unfortunately, no fact has been brought on record to show that there was an agreement as such between the deceased and the other partners who constituted the firm up to November 8, 1969. As a father, the deceased may have requested his erstwhile partners to take his sons into the firm. The other partners may not have objec....