https://www.taxtmi.com/caselaws?id=351038 A reallocation of partnership shares, even with a corresponding increase for one partner, is not by itself a taxable gift under the Gift Tax Act. The decisive issue is whether the Revenue can prove, on relevant evidence, that the transfer was made for inadequate consideration. Where the incoming partner contributes additional capital, provides collateral security and offers a personal guarantee, those elements may constitute consideration for the revised profit-sharing arrangement. Arithmetical comparison of profit shares alone is insufficient to satisfy the Revenue's burden. On the stated facts, the transaction fell outside the charging provision for gift tax. en-us Tue, 17 Oct 2017 00:00:00 +0530 Thu, 16 Nov 2017 11:09:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=351038 A reallocation of partnership shares, even with a corresponding increase for one partner, is not by itself a taxable gift under the Gift Tax Act. The decisive issue is whether the Revenue can prove, on relevant evidence, that the transfer was made for inadequate consideration. Where the incoming partner contributes additional capital, provides collateral security and offers a personal guarantee, those elements may constitute consideration for the revised profit-sharing arrangement. Arithmetical comparison of profit shares alone is insufficient to satisfy the Revenue's burden. On the stated facts, the transaction fell outside the charging provision for gift tax. Case-Laws Income Tax Tue, 17 Oct 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=351038