JUDGMENT Satish Chandra, J.
1. Sri Bishambhar Das Raizada died on 7th September, 1966. The Assistant Controller of Estate Duty, while evaluating his estate, took into consideration the goodwill of his shares in the two partnership firms, which were carrying on business. He also included a sum of Rs. 55,000 as estimated value of jewellery and other household effects available to the deceased at the time of his death.
2. The assessee went up in appeal to the Central Board of Direct Taxes. The Board held that a business firm does have a goodwill. It, however, adopted a different measure for computing the goodwill of the share of the deceased. In the firm, M/s. Bishambhar Dass Kishan Lal, the share of the goodwill of the deceased was assessed to Rs. 2,500. The Board upheld the addition of the value of jewellery but estimated its value at Rs. 35,000 on the ground that some part of the jewellery must have belonged to the wife of the deceased as her stridhan and so it could not be held to be deceased's property at the time of the death of the deceased.
3. At the instance of the assessee this court required the Board to submit a statement of the case for the opinion of this court on the following questions of law :
"(1) Whether it could be said in law that having regard to the nature of the business carried on by them the firms, M/s. Bishambhar Dass Kishan Lal and Hari Ram Prem Nath, owned goodwill, and whether the basis on which the share of the deceased in such goodwill has been computed by the Board is right in law ?"
"(2) Whether there is any evidence on the record to support the finding of the Board that the deceased left jewellery worth Rs. 35,000 ?"
4. The firm, Bishambhar Dass Kishan Lal, carried on business in purchase and sale of chaff cutting machines and parts thereof and supply of gittis and contract work. The other firm, M/s. Hari Ram Prem Nath, carried on business in grains and commission agency. Learned counsel for the assessee submitted that the deceased left no share in the goodwill of the firms as the firms were continuing' their business in which the heirs of the deceased were continuing to participate. There is no material on record or in the statement to sustain this factual foundation. There is no material to show that the two firms continued business or that the heirs of the deceased are partners in it. In Khushal Khemgar Shah v. Mrs. Khorshed Banu, AIR 1970 SC 1147 the Supreme Court has held that unless it was established that the right to a share in the assets of a partnership firm of a deceased partner is extinguished on his death, the normal position is that the share of a partner in the assets devolves on his legal representatives and that this principle will apply to the goodwill and other assets of the partnership. This decision, therefore, rules that a share of a partner in a partnership will devolve on the legal representatives of the deceased partner, in the absence of anything in the partnership deed to suggest that on such death the heirs will not get any share in any particular assets including the goodwill. In the absence of any material that in the case of these two partnership firms the heirs of the deceased were not entitled to have any share in the assets of the deceased, it must follow that a share in the goodwill of the partnership firms also passed on the death of the deceased.
5. In the next place it was submitted that a partnership firm carrying on the business of buying and selling commodities which are ordinarily available in the market does not obtain any goodwill, which may be said to have any money value. For this reliance was placed upon Seethalakshmi Ammal v. Controller of Estate Duty, [1966] 61 ITR 317 (Mad). In that case it was held that:
"Goodwill is the magnetic quality of a particular trade or businesses which attracts custom to it as a matter of course. This quality springs from and is developed by various contributing factors that earn a reputation for honest dealing, quality and standard. It is founded on the belief and faith of the customer and is commonly built up in relation to a particular type of manufacture or production of articles identified by a trade mark which becomes widely known to the public and by which the custom takes it for granted that it represents what they wish for. The standing of the business, the personalities who are engaged in the business, the location in which it is carried on and the like are contributing factors of goodwill. Where a business involves no indistinguishable features and deals in standard articles manufactured by someone else which one can get from anywhere, not merely from a particular dealer, there is hardly any possibility of there being a goodwill attached to such business."
6. That was a case in which the assessee was carrying on the business in yarn manufactured by reputed mills. It was held that whenever a business deals in commodities which are normally available and which are manufactured by someone else the business has no goodwill. In the decision relied upon it was held that goodwill is an advantage which a trade or business develops by virtue of factors like standing of the business, the personalities who are engaged in the business, its location and the like. These contributing factors are not necessarily confined to manufacture business. These are qualities which a person who is carrying on the business develops by the method of doing business to attract custom. It cannot be as a matter of law laid down that a business in ordinarily available and standard articles cannot have any goodwill.
7. That leads us to the next aspect of the first question, namely, the computing of the value of the goodwill. The Assistant Controller took into consideration the previous five years' profits and calculated the average profit. He evaluated the goodwill at two years of such average profit. The Board, on appeal, held that this basis was a little excessive. It held that goodwill is determined on two years' purchase after making allowance of reasonable interest on the capital. Learned counsel were not able to invite our attention to any particular principle on the basis of which it can be said that the Board erred in applying the two years' average profit after making the mentioned deduction.
8. The second question relates to the jewellery. The findings are that the deceased migrated from Pakistan to Indra in 1947. At that time he brought with him cash and jewellery and other household goods worth about Rs. one lakh. There was a finding that the deceased had invested a snm of Rs. 45,000 in business. It was held by the Assistant Controller that the balance of Rs. 55,000 was available with the deceased at the time of his death. The Board upheld this line of reasoning. It further held that some part of the jewellery must have belonged to the wife of the deceased as her stridhan. On this count it made a deduction of Rs. 20,000 and upheld the addition to the tune of Rs. 35,000 only.
9. The second feature of this case is that there is no finding as to the nature and character of the jewellery which the deceased brought from Pakistan when he migrated to India with his wife and children. There is no finding that the jewellery was such which males usually wear or possess. On the other hand, the finding is that some part of it must have belonged to his wife as stridhan. Jewellery normally is possessed by womenfolk. Since the deceased migrated from one country to another he must have taken the entire jewellery of his wife with him, as he was the head of the family. The fact that he brought jewellery along with his wife and children will not necessarily mean that the jewellery was his personal property. In our opinion in the absence of any proper detail the authorities were in error in assuming that the entire lot of jewellery he brought with him must have belonged to the deceased personally. The addition of Rs. 35,000 under this head was, in our opinion, not justified.
10. Our answer to the first question is in the affirmative, in favour of the department and against, the assessee. Our answer to the second question is in the negative, in favour of the assessee and against the department. In view of the divided success the parties will bear their own costs.