https://www.taxtmi.com/caselaws?id=65770 Admission of the assessee's son as a partner, with a corresponding reduction in the assessee's profit share, was treated as a commercial reconstitution of the firm and not a gratuitous transfer. The incoming partner brought capital that had earlier stood as a loan with the firm and was converted into capital on admission, and he also contributed active services useful to the business. On those facts, the arrangement was supported by consideration and did not amount to an act of bounty. The alleged relinquishment of share therefore did not attract gift-tax, and no taxable gift was found. en-us Sat, 21 Feb 1981 00:00:00 +0530 Fri, 18 Feb 2011 16:36:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=65770 Admission of the assessee's son as a partner, with a corresponding reduction in the assessee's profit share, was treated as a commercial reconstitution of the firm and not a gratuitous transfer. The incoming partner brought capital that had earlier stood as a loan with the firm and was converted into capital on admission, and he also contributed active services useful to the business. On those facts, the arrangement was supported by consideration and did not amount to an act of bounty. The alleged relinquishment of share therefore did not attract gift-tax, and no taxable gift was found. Case-Laws Income Tax Sat, 21 Feb 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=65770