1. The facts which have given rise to this reference under s. 64(1) of the E.D. Act, 1953, made at the instance of the Controller of Estate Duty are that the deceased Chimanlal Kapurchand Dalal was a partner in the in the firm of M/s. Chunilal & Co. At the date of death of the deceased, there were five partners in the said firm including the deceased, the deceased's share being 33-1/3rd per cent.
2. The question which has been referred to us is as follows:
'Whether, on the facts and in the circumstance of the case, one-third value of the goodwill of the firm of M/s. P. Chunilal & Co., is chargeable to duty in the hands of the accountable person under the Estate Duty Act, 1953 ?'
3. It is not clear from the record, what the department has done with respect to the valuation of the deceased's share in the said firm for the purpose of including it in its dutiable estate. In Estate Duty Reference No. 2 of 1973, along with estate Duty Reference Nos. 2 of 1974 and 9 of 1979 - CED v. Fakirchand Fatehchand Sachdev, delivered on August 14, 17 and 18, 1981 (see p. 268 supra), we have held that what passes on a partner's death is his share in the partnership and that the department is not entitled to pick up just one item of partnership property, treat it as if the deceased partner had a defined, specific share in it and include the value of such share to his estate passing on death. It is contended by Mr. Joshi, learned counsel for the department, that in this case the value of the assets other than the goodwill exceeded the total liability and that the dispute was with respect to the valuation to be placed upon the goodwill. For this purpose, Mr. Joshi relied upon the order of assessment passed by the Asst. Controller. This position is not accepted on behalf of the accountable person. The correct position will have to be ascertained by the Tribunal when it finally comes to dispose of the appeal in the light of our judgment. Accordingly, we answer the question submitted to us as follows:
The 1/3rd value of the goodwill of the firm of M/s. P. Chunilal & Co. alone was not liable to be charged to estate duty, but the value of the goodwill of the said firm was liable to be taken into account in ascertaining the value of the share of the deceased in the said firm.
4. There will be no order as to costs of this reference.