TaxTMI 
TaxTMI 
1983 (3) TMI 96
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....n of the deceased submitted that on the date of death the deceased had no goodwill or interest in the firm and her share of goodwill was not includible in the principal estate left by her. The Assistant Controller held that the firm had goodwill and since it was not adjusted after the retirement of the deceased from the aforesaid firm to her account, the share of the deceased in the goodwill of the firm at the time of retirement was a gift made within two years. He, accordingly, included the sum of Rs. 1,03,042, being 15 per cent of the deceased's share in the goodwill of the firm determined at Rs. 6,86,952. 6. The accountable person appealed to the Commissioner (Appeals) and contended that the Assistant Controller was wrong in holding t....
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....osition the expression ' property ' shall include the benefit conferred by the extinguishment of debt or right. If, therefore, the firm had goodwill as an asset to which the deceased was entitled and if she did not take her share in that asset, it is an extinguishment at the expense of the deceased of her right in favour of the remaining partners and this is a disposition in view of the provision of Explanation 2 to section 2(15). In this case the other partners were only the sons and grandsons of the deceased and, therefore, the disposition as explained above is in favour of relatives without any consideration. This would be a gift under section 9 read with section 27(1). A similar question had come up for consideration before the Supreme ....
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....swariah's case, 76 ITR 675, relied upon by the appellant's representative, is not relevant to this issue as that was a case regarding the meaning of the term ' transfer ' in relation to throwing of a separate property into a common hotchpot of a HUF. Since in the estate duty the term ' disposition ' is much wider than the form ' transfer ' and the Supreme Court has made such relinquishment as disposition in the case cited earlier, the argument of the appellant's representative that this cannot be treated as gift is not acceptable." The Commissioner (Appeals) was, however, of the opinion that the quantum of the deceased's share of goodwill, as determined by the Assistant Controller, was excessive and he reduced the same to Rs. 71,961. 7. ....
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....ection 2(15), regarding an unequal partition between the members of a HUF. Reliance was also made to the provisions of section 6 of the Act and it was pointed out that since the deceased had no right to transfer her share of goodwill on her date of death, it was not includible in her principal estate. Reliance was placed on the decision of the Allahabad High Court in the case of CED v. Smt. Laxmi Bai [1980] 126 ITR 73 wherein a decision of the Supreme Court in the case of CIT/CED v. N.R. Ramarathnam [1973] 91 ITR 1 had been considered. In that case the deceased, his three sons and a daughter were partners in a firm which carried on money-lending business. On 31-3-1953 and 1-4-1956, the deceased transferred to his sons and daughter amounts t....
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....agent for the products of Usha Martin Black, had the benefit of control of the market regarding sale of that products. Therefore, the said firm had goodwill. Reliance was also placed on the decision of the Supreme Court in the case of Kantilal Trikamlal and urged that the provisions of sections 9(1), 27(1) and Explanation 2 to section 2(15) were applicable to the facts of the instant case. 9. The goodwill of the firm UBM Sales & Services was not confined to manufacturing business. The Allahabad High Court in the case of Smt. Kamlawati Raizada v. CED [1976] 105 ITR 703 has held that business ordinarily available and standard articles can also have goodwill. We are, therefore, of the opinion that the firm had goodwill. However, section 5 o....