https://www.taxtmi.com/caselaws?id=70166 Conversion of a proprietary business into a partnership did not amount to a deemed gift where the incoming partners contributed capital in proportion to their shares, the proprietor also introduced capital for his reduced interest, and he was separately paid for managing the firm. The decisive test under the Gift-tax Act was whether the proprietor had relinquished his interest without consideration; on these facts, the capital contributions by the other partners supplied adequate consideration for the restructuring. The transfer of interest in the business was therefore not gratuitous, so no deemed gift arose and the addition was deleted. en-us Mon, 28 Aug 1978 00:00:00 +0530 Mon, 23 Jan 2012 17:49:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=70166 Conversion of a proprietary business into a partnership did not amount to a deemed gift where the incoming partners contributed capital in proportion to their shares, the proprietor also introduced capital for his reduced interest, and he was separately paid for managing the firm. The decisive test under the Gift-tax Act was whether the proprietor had relinquished his interest without consideration; on these facts, the capital contributions by the other partners supplied adequate consideration for the restructuring. The transfer of interest in the business was therefore not gratuitous, so no deemed gift arose and the addition was deleted. Case-Laws Income Tax Mon, 28 Aug 1978 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=70166