1981 (2) TMI 101

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....he correct quantum of such goodwill which is alleged to have passed on the death of Shri Tilak Raj Anand. 2. Shri Tilak Raj Anand, the deceased was engaged in the business of dealership of various products of Hindustan Petroleum Corporation Ltd. He carried on the proprietary business till 31st March, 1976. With effect from 1st April, 1975 he took his son Suresh Anand as a partner. Shri Tilak Raj Anand was 80 paise partner while the share of Suresh Anand was confined to 20 paise in a rupee. Clause II of the Instrument of Partnership stated that the business of partnership was to deal in lubricants and other products of Hindustan Petroleum Corpn. Ltd. In effect it meant that the business of partnership was only to be a dealer of the produc....

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.... any way. In this view of the situation it was not proper to infer a finding that any goodwill could attach to the dealer whether it was the deceased Shri Tilak Raj Anand or M/s. Subhash Lubricants, the firm. Whatever goodwill was attached to the principal M/s. Hindustan Petroleum Corpn. Ltd. and not to its distributor who was merely an agent of the principal. The CED was, however, not persuaded by this reasoning. He upheld an addition of Rs.52,195 on this score but he caused a change in the basis on which the addition for goodwill was to be made. According to him the goodwill passed on the death of the deceased to the other partner. He made the observation, "even if it is considered that kerosene supplied by M/s. Hindustan Petroleum Corpn.....

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....nd Haryana High Court at Chandigarh, State vs. Prem Nath 1977 CTR (P&H) 187 : (1977) 106 ITR 446) P&H) (FB) 4. Having heard the rival contentions we find force and substance in the submissions raised on behalf of the Accountable Person. It is true that goodwill of a firm is an asset of the firm and the share of the deceased partner in which along with his share in other assets of the firm devolves for purposes of estate duty on his death upon his legal representatives but this rule of law cannot apply to the facts of the present case. In the present case there were only two partners late Shri Tilak Raj Anand and Shri Suresh Anand his son. As Shri Tilak Raj Anand died, the partnership came to an end. It was the partnership which was appoi....