| Case ID |
e14995ed-8949-4cd2-9782-31785f5c4e66 |
| Body |
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| Case Number |
ED Reference No. 2 of 1973, 2 of 1974, and 9 of 19 |
| Decision Date |
Aug 14, 1982 |
| Hearing Date |
Aug 14, 1981 |
| Decision |
The Bombay High Court held that the deceased partners' shares in the partnerships did pass, including goodwill, but the valuation of the deceased partners' shares for estate duty was unjustified as the department had picked only one item, goodwill, out of the partnership properties, ignoring other assets and liabilities. The court emphasized that a partner does not have a specified share in the individual assets of the firm, and the valuation must consider the totality of the partnership properties. The tribunal's decision to delete the value of goodwill from the estate valuation was upheld, reinforcing the principle that goodwill, being an intangible asset, is part of the firm's collective property and does not constitute a separate, specified share for estate duty purposes. |
| Summary |
In this landmark case before the Bombay High Court, the court examined the complexities surrounding the valuation of a deceased partner's interest in a partnership, particularly concerning goodwill and estate duty implications. The case involved three references under the Estate Duty Act, 1953, centering on whether a partner's interest in the goodwill of a firm constitutes property that passes on death. The court concluded that goodwill is an asset of the firm, and thus, a partner does not possess a defined share in it. The decision emphasized that the valuation for estate duty must account for the entirety of the partnership's assets and liabilities, rejecting the notion that goodwill could be treated as a standalone asset. This case highlights the intricacies of partnership law, the nature of goodwill as an intangible asset, and its treatment under estate duty regulations, making it a significant reference for legal practitioners and scholars alike. |
| Court |
Bombay High Court
|
| Entities Involved |
Not available
|
| Judges |
D.P. Madon,
Sujata Manohar
|
| Lawyers |
S.E. Dastur,
C.B. Mehta,
N.A. Dalvi,
V.H. Patil,
N.R. Jagtap,
S.S. Shetty
|
| Petitioners |
Not available
|
| Respondents |
Fakirchand Fatehchand Sachdev
|
| Citations |
1982 SLD 891,
(1982) 134 ITR 268
|
| Other Citations |
Addanki Narayanappa v. Bhaskara Krishnappa AIR 1966 SC 1300,
CED v. Aloke Mitra [1980] 126 ITR 599 (SC),
CGT v. P. Gheevarghese, Travancore Timbers Products [1972] 83 ITR 403 (SC),
CED v. Kasturi Lal Jain [1974] 93 ITR 435 (J & K),
Smt. Lakshmisagar Reddy v. CED [1980] 123 ITR 601 (AP),
Mrs. Khorshed Shapoor Chenai v. ACED [1980] 122 ITR 21 (SC),
CED v. Smt. Usha Devi Patankar [1970] 76 ITR 347 (MP),
CED v. John Gregory Apcar [1979] 119 ITR 192 (Cal.)
|
| Laws Involved |
Estate Duty Act, 1953
|
| Sections |
5,
7(1)
|