Family partition and partnership dissolution reallocating antecedent rights do not create a deemed gift for gift tax purposes.

A family partition or dissolution of partnership that merely reallocates assets in line with antecedent rights does not create a new transfer for gift tax purposes. Where property originally stood in the joint or common enjoyment of family members, an allotment to one member is treated as a rearrangement of existing interests rather than a voluntary transfer without consideration. The statutory concept of "gift" under the Gift Tax Act therefore applies only when there is a genuine transfer of title for no consideration, which is absent in a partition or similar family adjustment.

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Issues: Whether the allotment of the house property to the mother on dissolution of the partnership or on family adjustment amounted to a deemed gift by the assessee, attracting gift tax.

Analysis: The property was originally held by the mother and the two sons, and the subsequent arrangement was examined either as a family adjustment akin to partition or as an allotment on dissolution of the partnership. In either situation, the person claiming to have gifted the property had only an antecedent share and no transfer of a new title arose. A partition merely transforms joint enjoyment into enjoyment in severalty, and the dissolution of a partnership followed by allotment of assets does not amount to a transfer giving rise to a gift tax liability. The statutory concept of gift under the Gift Tax Act applies only where there is a voluntary transfer without consideration, and that requirement was not satisfied here.

Conclusion: The allotment did not constitute a deemed gift, and the answer is in favour of the assessee.

Final Conclusion: The reference was answered by holding that no gift tax liability arose on the facts found, and the remaining questions were treated as unnecessary for separate adjudication.

Ratio Decidendi: Where a family partition or dissolution of partnership merely reallocates assets according to antecedent rights, there is no transfer creating a deemed gift for the purposes of gift tax.

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