TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether, on dissolution of a partnership firm, an unequal allotment of assets to one partner for consideration below the market value of his share amounts to a transfer of property and a gift within the meaning of the Gift-tax Act, 1958.
Analysis: The definitions of "gift", "property", and "transfer of property" in the Gift-tax Act are wide. A normal distribution of partnership assets on dissolution, corresponding or approximately corresponding to the partners' shares, is merely an adjustment of rights and does not amount to a transfer. However, where the distribution is unequal and one partner receives assets of lesser value than that to which he is entitled, while the other correspondingly receives more, the transaction falls within the extended meaning of "transfer of property", particularly the clause covering a transaction intended to diminish one person's property and increase another's. The fact that partnership assets are distributed on dissolution does not prevent the excess value received by one partner at the expense of the other from being treated as a transfer and, to that extent, a deemed gift.
Conclusion: The release by the assessee of his rights in the partnership assets for Rs. 3,00,000, when the market value of his share exceeded that amount, amounted to a gift to the extent of the excess value and was exigible to gift-tax.
Ratio Decidendi: On dissolution of a partnership, equal or approximately equal distribution of assets is not a transfer, but any excess allocation to one partner at the expense of another, resulting in a corresponding diminution of the latter's share, is a transfer of property and a gift under the Gift-tax Act.
TaxTMI 
TaxTMI 
