S. D. DAVE, J. ( 1 ) THE Income Tax Appellate Tribunal, Ahmedabad Bench (B) has referred the undermentioned questions to this Court for opinion and answer, exercising the jurisdiction vested in them under section 64 of the Eslatc Duty Act, 1953. (1) "whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in law in holding that the deceaseds l/4th share in the tenancy rights in the partnership firms business premises at Ahmedabad and Calcutta did not pass on his death? (2) "whether, on the facts and in the circumstances of the case, the Appellate tribunal was justified in law in holding that there was wilhin the meaning of section 9 (1) Estate Duly Act no gift of any share of the deceased in the tenancy rights in the partnership firms business premises at Ahmedabad and calcutta in favour of any children taken as partners or admitted to the benefits of partnership?"the facts and circumstances under which this reference has been made to this court may be noticed thus :- one Shantilal Chunilal Shah died on March 31, 1970 leaving a Will dated 23-4-70. The Estate Duty account was filed by the accountable person on 15lh April, 1971. The deceased was assessed to income-tax and wealth-tax, and his estate consist of immovable properties, gift made within the period of two years, shares, credit balances in the partnership firms, jewellery and ornaments, annuity deposits, cash at bank and on hand, household goods and interest with the partnership firm of Bipinchandra Shamilal. The deceased was carrying on the proprictory business in cloth in the name and style of bipinchandra Shanulal at two premises till 13-11-69. The tenancy rights of both the business premises at 2-3 Sir Chinubhai Building, Ahmedabad and at No. 14 Nirmal Lohia and 37-38 Armenia Street, Calcutta, were acquired by the deceased by paying the sum of rs. 40000/- according to the award dated 10-4-61 given by the Arbitrator. The value of the tenancy rights of the said business premises was not shown in the Estate Duly account by the accountable person on the ground that, looking to the nature of ihc business there was no goodwill. With effect from 14th, November, 1969 the propriciory business carried on by the deceased was converted into partnership firm by taking the son Bipinchandra and daughter Mrudulaben as partners. With effect from 14th, November, 1969 the propriciory business carried on by the deceased was converted into partnership firm by taking the son Bipinchandra and daughter Mrudulaben as partners. The minor son of the deceased, namely Somil was also admitted to the benefit of partnership. This partnership firm had taken over all the assets and liabilities of the proprictory business, including the tenancy rights of the aforesaid two business premises. It was, according to the assessing officer, evidenced from para 8 of the partnership deed dated 15th November, 1969, that the goodwill and the tenancy rights of the business premises shall be equally shared by the three partners and the minor who was admitted to the benefit of the partnership, meaning thereby that each of them had 1/4th. share in the value of the goodwill and the tenancy rights. It was, therefore, contended that at the most the value of the 1/4th share of the deceased in the tenancy rights of the business premises should be included in the estate of the deceased. This contention was not accepted by the assessing officer on the ground that admitcdly the deceased had purchased the tenancy rights for the sum of Rs. 40000/- and he had parted with 3/4th. share in the said tenancy rights of the business premises in favour of his children without any consideration whatsoever. It was, therefore, held by the assessing officer that, such parting away of the 3/4th share in the valuable tenancy rights of the business premises amount to surrender and extinguishment of the rights of the deceased in favour of the children within the meaning of the provisions of Sec. 2 (15) of the Act. It was also found that it amounted to a gift as it had taken place within a period of two years prior to the date of the death of the deceased who was liable to pay estate duty under sec. 9 read with sec. 2 (15) of the Act. Thus according to the assessing officer the value of the deceads 1/4th share amounting to Rs. 10,000/- in the tenancy rights of the business premises were liable to be treated to estate duly under section 5 of the Act, while the value of the 3/4th share amount to Rs. 30,000/- was liable to estate duty under scc. 9 read with sec. 15 of the Act. 10,000/- in the tenancy rights of the business premises were liable to be treated to estate duly under section 5 of the Act, while the value of the 3/4th share amount to Rs. 30,000/- was liable to estate duty under scc. 9 read with sec. 15 of the Act. The above said orders passed by the Assessing Officer came to be challenged by the accountable person by filing Appeal before the Appellate Controller of estate Duly, at Ahmcdabad. The appellate authority had taken the view that the Assistant controller had reached the above said conclusion on the basis that the deceased has his 3/4th share in the available tenancy rights of the business premises the gift of which amounts to surrender or extinguishment of the righis of the deceased in favour of the children. The appellate authority has also taken the view that the 3/4th share of the tenancy rights accordingly becomes liable to estate duly under sec. 9 read with sec. 2 (15) of the Act. The Appellate Controller of Eslale Duty following the same line of reasoning had come to the conclusion that the orders pronounced by the Assistant Controller, rejecting the claim made by the asscssee, were according to law, and, therefore, appeal filed by the accountable person came to be dismissed vide the orders dated 17th March, 1975. The matter was carried by the accountable person before the Income Tax Appellate tribunal, Ahmcdabad Bench. The contention raised before the Tribunal was that the authorilies below had erred in including the above said so called estate of the value of Rs. 40,000/- as liable to estate duty in the hands of the accountable person. The Tribunal had noticed that the deceased, his son Bipinchandra and daughter Mrudulaben had taken over the business which the deceased was running in the name and style of Bipinchandra shanlilal on November 15,1969. It was also observed as to why the Assistant Controller, estate Duty had deducted only one of the partners assets, namely tenancy righis in respect of the business premises for the purpose of valuing the interest of the deceased and applying the provisions of sec. 9. The Tribunal placing reliance upon the Supreme court decision in 83 ITR, pg. It was also observed as to why the Assistant Controller, estate Duty had deducted only one of the partners assets, namely tenancy righis in respect of the business premises for the purpose of valuing the interest of the deceased and applying the provisions of sec. 9. The Tribunal placing reliance upon the Supreme court decision in 83 ITR, pg. 403, was of the opinion that the case was duly covered by the principle laid down by the Supreme Court in the aforcmcntioncd case, and that, therefore, theassessing authorily could not have adopted the process of pick and choose thereby picking and choosing, only one branch of the assets of the deceased. It is broadly on these basis that the Tribunal had preferred to come to the conclusion that the action on the part of the authorities below, in picking and choosing one of the assets only of the deceased, was not in accordance with law and that, the above said procedure runs counter to the principle laid down by the Supreme Court in the aforementioned case law, namely 83 ITR, pg. 403. Taking this view, the Tribunal allowed the appeal, as a result of which ultimately the reference application was submitted by the Revenue. It is in this way that the aforementioned questions have been referred to us for our answer and reply. ( 2 ) A reference to Sec. 5 of the Act of 1953 which falls within Chapter II which pertains to the imposition of Estate Duty shows that a duty called "estate Duty" shall be levied and paid upon the principal value of all the properties which pass on the death of a person. ( 3 ) THE facts out of which the present reference arises are duly recorded in the orders of the authorities below and the Tribunal also. Caluse-8 of the Partnership deed which has a relevance to the question under consideration may be appreciated first. It is provided that all the three partners and the minor shall have equal rights in goodwill and tenancy rights of the firm, that is each one will get, l/4th share. Clause II of the partnership deed also requires to be read in juxtaposition which provides that the partnership is a "partnership At Will". It is provided that all the three partners and the minor shall have equal rights in goodwill and tenancy rights of the firm, that is each one will get, l/4th share. Clause II of the partnership deed also requires to be read in juxtaposition which provides that the partnership is a "partnership At Will". It, therefore, becomes clear that all the three partners and the minor have been given equal rights in the goodwill and tenancy rights of the firm each getting 1/4th share therein. As we see the above said facts are not in dispute and it is a common ground that the present reference shall have to be decided on the basis of the said facts. ( 4 ) THE assessment orders in respect of the estate duty at Anncxure-A would go to show that the followings were the assets of the deceased in form of immovable properties: IMMOVABLE PROPERTY : (1) Bunglow bearing C. 68 at Jain Society Paldi, value of S. O. portion being less then Rs. 1 lakh it is exempted u/s. 33 (1) (n) of the Act. Rs. Nil (2) Value of the rented portion as per valuers report. 18,000-00 (3) Property bearing C. No. 575, 575/1 and 2 etc. at Relief Road, value adopted as per valuers report. 96,000-00 (4) Property bearing C. No. 146 and 147 at Baja Patels Pole, Relief Road, Value as per valuers report. 22,100-00 (5) Value of gift of 1/2 share in open land bearing C. No. 19 (1) and 19 (2) situated at Sabarmati Achar, Value adopted as per Valuers report. 56,200-00 Total 1,92,300-00 Following were taken as assets in the form of movable properties : MOVABLE PROPERTY: (1) Shares Rs. 2,951-00 (2) Jewellery and ornaments value shown at Rs. 49,489/-adopted at Rs. 53,000/- taking into account the increase in the price of Gold and Jewellery. 53,000-00 (3) Market value of the credit balance standing with Shantilal Bhogilal, M/s. Ratanlal Chunilal and M/s. Bipinchandra Shantilal as discussed above. 32,653-00 (4) Annuity Deposit 2,80,904-00 (5) Cash at Bank 14,064-00 (6) Cash on hand 1,588-00 (7) Telephone 1,000-00 (8) Furniture in excess of Exemption limit. 2,000-00 (9) l/4th share in the tenancy rights of the business premises at Ahmedabad, Calcutta as discussed above. 32,653-00 (4) Annuity Deposit 2,80,904-00 (5) Cash at Bank 14,064-00 (6) Cash on hand 1,588-00 (7) Telephone 1,000-00 (8) Furniture in excess of Exemption limit. 2,000-00 (9) l/4th share in the tenancy rights of the business premises at Ahmedabad, Calcutta as discussed above. 10,000-00 (10) Value of 3/4th share in the tenancy rights of the business premises situated at Ahmedabad and Calcutta treated as liable to duty u/s. 9 read with Sec. 2 (15) of the Act, as discussed above. 30,000-00 (11) Insurance, premium paid in respect of MWP Policy during the last 2 years treated as gift u/s. 9 of Act. 6,912-00 (12) Income-tax refund due. 34,605-00 (13) Gift of insurance policy amount assigned in favour of wife treated as liable to duty u/s. 10 of the Act as discussed above. 24,000-00 Rs. 4,07,573-00 Less: Funeral expenses Wealth-tax liability Medical bills Balance in the firm of M/s. Bipinchandra Shantilal Rs. 1,000 609 1,369 2,37,599 1,40,577-00 PRINCIPAL VALUE Rs. 2,66,996-00 item No. 9 and item No. 10 would go to show that the deceased had l/4th share in the tenancy rights of the business premises at Ahmedabad and Calcutta. Item No. 10 would go to show that the value of the 3/4th share in the tenancy rights of the business premises situated at Ahmedabad and Calcutta have been treated as liable to duty under sec. 9 read with S. 2 (15) of the act, and the value shown is Rs. 30. 000/ -. Thus a joint reading of item no. 9 and item no. 10 would go to show that an amount of Rs. 40. 000/- has been included in the estate of the deceased which had gone to the hands of accountable person. ( 5 ) THE Tribunal had come to the conclusion that the case was duly covered by the supreme Court decision in Commissioner of Gift-tax, Kerala vs. P. Gheeverghese, travancore Timbers and Products, 83 I T R, Pg. 403. The facts noticed by the Supreme court are to the effect that the assessee was the sole proprietor of a business and he had converted it into a partnership business by deed dated August 1, 1963. The partnership was to consist of the assessee and his two daughters. The capital of the partnership was rs. 4 lakhs of which his contribution was Rs. 3. 50. 000/- and the contribution of the capital of Rs. The partnership was to consist of the assessee and his two daughters. The capital of the partnership was rs. 4 lakhs of which his contribution was Rs. 3. 50. 000/- and the contribution of the capital of Rs. 25,000/- each was by the daughters which was effected by the transfer of rs. 25. 000/- from the assessces account to the account of each daughter. For the assessment year 1964-65 the assessee had filed a return in respect of the gift of Rs. 50. 000/- in favour of his daughters representing the share capital contributed by them. The gift-Tax Officer held that, in addition, the assessee had gifted one third share each in the goodwill of his business to his daughters. The Tribunal had also held that the gift was only of 1/8th share in the goodwill but the gift to the daughters was exempted under section 5 (1) (xiv) of the Gift-tax Act, 1958 on the ground that the assessee was actually carrying on the business when he admitted his two daughters into it. Ultimately it was held by the Supreme Court that, though according to the deed of partnership, goodwill was a part of the properties and assets of the business which the assessee had transferred to the partnership, the departmental authority never treated all the assets and properties of the assessee which were transferred to the partnership as the subject-matter of gift. It is in this view of the facts and circumstances that the Supreme Court has observed thus :-"the departmental authorities in the present case, never treated all the assets and property of the assessee which were transferred to the partnership pertaining to his proprielory business as a gift nor has any suggestion been made before us on behalf of the revenue that the property and assets valued at rs. 4,00,000 were the subject-matter of gift. All that the departmental authorities did and that position continued throughout was that they picked up one of the assets of the assessecs proprielory business, namely, the goodwill, and regarded that as the subject of gift having been made to the daughters who were the other partners of the firm which came into existence by virtue of the deed of partnership. This approach is wholly [incomprehensible. This approach is wholly [incomprehensible. "the said observations made by the Supreme Court would go to show without any manner of doubt that the action of the department in not treating all the assets and in picking up only one of the proprielory business, namely the goodwill and regarding it as the subject of gift was wholly incomprehensible. ( 6 ) THE facts of the reference on hand arc more or less similar. As pointed out by us earlier, though the partnership business had other assets,the assscssing authority had taken into consideration only two parts of the assets. It is, therefore, abundantly clear that, the assessing authority had preferred to pick up and choose only the above said assets out of the assets of the deceased, which had gone to the partnership business at the rclcvant time. In our view, therefore, the present case is duly covered by the aforesaid decision of the supreme Court in case of the CGT, Kerala vs. P. Gheeverghese (Supra ). We arc of the opinion that the Tribunal was perfectly justified in deciding the rival contentions of the assessee and the Revenue in view of what has been staled by ihc Supreme Court in aforementioned case. ( 7 ) OUR allcntion has been drawn by the Learned. Counsel Mr. Thakorc to the Bombay high Court decision in Controller of Estate Duty, Bombay City-1 vs. Fakirchand Fateh chand Sachdev and Ors. , 134 ITR. pg. 259. In that case also a similar view has been taken by the Bombay High Court, placing reliance upon the above said Supreme Court decision. In Controller of Estate Duty, Bombay City-II vs. Mrs. Jayalaxmi Chimanlal Dalai, 134 itr pg. 314, again the Bombay High Court has reiterated the same principle by saying that what passed on the death of a partner of a firm is his share in the partnership and revenue is not entitled lo pick up just one item of partnership properly. It is therefore clear that the aforesaid two decisions of the Bombay High Court also support the view which we are taking in the inslant reference. Mr. Thakorc has lastly placed reliance upon the decision in CGT vs. AM. Abdul Rahman Rowther, 89 ITR pg. 219. In that case the assessee was carrying on business as sole proprietor. It is therefore clear that the aforesaid two decisions of the Bombay High Court also support the view which we are taking in the inslant reference. Mr. Thakorc has lastly placed reliance upon the decision in CGT vs. AM. Abdul Rahman Rowther, 89 ITR pg. 219. In that case the assessee was carrying on business as sole proprietor. On June 09, 1954, he had converted his business into a partnership business, consisling of himself and his two daughters. He had 60 percent share in the assets and the profit and loss and his two daughters had 20 percent share each in the partnership business. The firm was recognised by the Court as being genuine and entitled to the registration. Any how, subsequently on November 2, 1960, the assessee had transferred a sum of Rs. 25,000/- each to his daughter from his share capital accounl. Thereafter on November 3, 1960, a partnership deed was executed with the daughter and son as the partners. The deed provided that the gross assets and liabilities of the predecessor-firm shall form the assets and liabilities of the partnership business. It was found as a fact that there was a transfer of interest in properly when the assessee had taken his daughter and son into the partnership and had assigned them a portion of the share capital and there was a re-distribution of the profil sharing ratio on the admissions of new two partners and that amounted lo a gift by the assessee of a portion of his share in the goodwill of the firm. Mr. Thakorc has urged, on the basis of the above said principle laid down by the Madras High Court that, in the instant case also the inescapable conclusion would be that the property which had passed on the death of the deceased, even though in connection with only two items must be regarded as assets in the hands of the accountable person liable to the estate duly. But it requires to be appreciated that the facts before the Madras High Court were entirely different. The asscssce was carrying on the business which was a sole proprictory business, which was later on converted into a partnership business and subsequently the asscssce had transferred a sum of Rs. 25,000/- each to his daughter and son from his share capital account. The asscssce was carrying on the business which was a sole proprictory business, which was later on converted into a partnership business and subsequently the asscssce had transferred a sum of Rs. 25,000/- each to his daughter and son from his share capital account. Thus the facts and circumstances being entirely different, in our opinion, the above said decision rendered by Madras High Court on which the Learned Counsel Mr. Thakore has placed reliance would not be able to further the case of the Revenue before us. ( 8 ) THUS it appears very clear to us that the Tribunal was justified in law in holding that the 1/4th share of the deceased in the tenancy rights in the partnership business premises at Ahmcdabad and Calcutta did not pass on his death and in the same way, the tribunal was further justified in law in holding that there was within the meaning of section 9 (1) Estate Duty no gift of any share to the deceased in the tenancy rights in the partnership firm. We therefore answer and reply both the above said questions in - affirmative in favour of the Asscssee and against the Revenue, with no order as to costs. Answer accordingly. .