This appeal has been filed by accountable person. name of deceased is Shri Cawas M. Mody. date of death is 31-1-1973. At time of his death, deceased was partner in firm of 'C.J. Industries (L. N. L.)' and 'C.J. Industries (Cold Storage Department)'. Under clause 3(b) of partnership deed, it was provided that goodwill, trade name and tenancy right of premises in which partnership business were carried on would belong exclusively to deceased Shri Cawas M. Mody. In clause 3(c) of partnership deed it was mentioned that goodwill of partnership business should be valued at 18 months' purchase of average annual profits of last completed four years or shorter period as case might be and should not in any event for purpose of accounting between partners either upon dissolution or upon death of said deceases Shri Cawas M. Mody be valued t more than Rs. 50,000. contention of accountable person before Assistant Controller was that value of goodwill to be included in principal value of property passing on death could not exceed Rs. 50,000 in view of clause 3(c) of partnership deed. Assistant Controller rejected said submission. He observed that under clause 3(b), goodwill belonged exclusively to deceased and that under clause 3(c) restriction of Rs. 50,000 applied only to price of goodwill payable to legal heir of deceased. It did not represent market value of property passing on death. market value of goodwill as on date of death would be deemed to pass on death, and fact that legal heir would be entitled to only Rs. 50,000 was irrelevant. He relied on decision of Privy Council in Perpetual Executors & Trustees Association of Australia Ltd. v. Commissioner of Taxes of commonwealth of Australia [1954] 25 ITR (ED) 47. He estimated value of goodwill at time of death at Rs. 75,829 and added this amount instead of Rs. 50,000 mentioned by accountable person. 2. In appeal filed by accountable person, Controller observed that out of value of goodwill as on date of death, value worth Rs. 50,000 passed to legal heirs, while balance passed to other partners. Consequently, value of goodwill on date of death was liable to be included in principal value of property passing on death. He, therefore, confirmed order of Assistant Controller. accountable person has now come in appeal before us. On his behalf reliance is placed on two decision. Both decisions are of Gujarat High Court. first decision is Smt. Mrudula Nareshchandra v. CED [1975] 100 ITR 297. second decision is CED v. Bahubhai Harjivandas [1981] 129 ITR 276. learned departmental representative has relied on reasons given in orders of lower authorities. 3. We have considered rival submissions. leading case on this subject is decision of Privy Council in Perpetual Executors & Trustees Association of Australia Ltd.'s case (supra). In that case deceased was partner in firm and partnership deed provided that firm would not be dissolved by death of partner and further that on death of partner, surviving partners would have option to purchase deceased's share in partnership, purchased price being determined as mentioned in deed of partnership. It was specifically agreed that in computing price, no sum should be taken into account for goodwill. On death of deceased partners who survived him duly exercised options conferred on them and purchase price was ascertained in accordance with precisions of deed, n o sum being added or taken into account by way of goodwill. legal representative declared value of deceased's interest in partnership to be price at which, pursuant to deed, they were obliged to sell it to surviving partners. revenue authorities claimed additional amount of estate duty in respect of share of deceased in goodwill of business. Privy Council held that interest of deceased in all partnership assets, including goodwill, passed to his legal representatives, who were bound to transfer that interest of deceased in all partnership deed and that fact that value of goodwill was not to be taken into account in calculating price receivable by estate for deceased's interest in partnership was wholly irrelevant. This decision is authority for proposition that property in goodwill would pass to legal heir as well as surviving partners in spite of fact that in partnership deed, it is mentioned that value of goodwill should not be taken into account while determining value of interest of deceased in partnership. On same principle, in present case, market value of goodwill at time of date of death of deceased would be included in principal value of property passing on death in spite of fact that partnership itself provides that value of goodwill while taking accounts on date of death of deceased would not exceed Rs. 50,000. only effect of this restriction would be that legal heir would not be entitled to receive more than Rs. 50,000 on account of goodwill when accounts are taken. However, goodwill to extent of remaining value would pass on to surviving partners. Consequently, it is market value of goodwill on date of death of deceased, which would be includible and not merely market value of that part of goodwill which passed on to legal heir. 4. decisions on which learned counsel for assessee relied on are of no assistance. In both Gujarat High Court decisions, stipulation in partnership deed was that heirs of deceased would not be entitled to any amount towards value of goodwill on disillusion of firm by death. It was held that goodwill did not pass on death of partner. In our case stipulation is not that on taking account on death of partner, goodwill would not be considered at all. What is stipulated is that value of goodwill to be taken into account would not exceed Rs. 50,000. Thus, it is clear that in our case stipulation itself indicated that goodwill would pass. restriction put was on value of goodwill. When it is held that property has passed of death, what becomes relevant is its value on date of death and not direction of deceased in his lifetime that on his death value of such property should be restricted to particular figure. In fact, direction of this type is to be ignored in determining value of property passing on death. 5. As regards two decisions of Gujarat High Court, we may state that in latter decision High Court felt itself bound by earlier decision in case of Smt. Mrudula Nareshchandra (supra) has been dissented by Madras High Court in CED v. Ibrahim Gulam Hussain Currimbhoy [1975] 100 ITR 320 and by Full Bench of Punjab and Haryana High Court in State v. Prem Nath [1977] 106 ITR 446 where it was observed that view of Gujarat High Court was opposed to view of Privy Council in case of Perpetual Executors & Trustees Association of Australia Ltd. (supra). We may also mention that in earlier decision of Gujarat High Court in Sakarlal also mention that in earlier decision of Gujarat High Court in Sakarlal Chunilal v. CED [1975] 98 ITR 610, view contrary to view taken in subsequent two decisions had been taken. 6. learned counsel for accountable person argued that in this case deceased ceased to have interest in goodwill in his lifetime. We are unable to agree with this contention. No clause in partnership deed could be pointed out in support of this contention. 7. For reasons already given, we hold that fair market value of goodwill on date of death was includible in value of property passing on death and that there was no legal justification for restricting its value to Rs. 50,000 because of provisions in clauses 3(b) and 3(c) of partnership deed. 8. appeal fails and is dismissed. *** ESTATE OF C.M. MODY A.P.J.C. MODY v. CONTROLLER OF ESTATE DUTY