https://www.taxtmi.com/caselaws?id=11578 Conversion of a proprietary business into a partnership, with incoming partners contributing capital and receiving profit shares linked to those contributions, does not constitute a deemed gift unless inadequacy of consideration is established for the business as a whole. Valuation cannot isolate a single asset to determine an alleged gift. Where the business continues after conversion, the dissolution-based rule requiring stock valuation at market value does not apply. Closing stock must instead be valued under ordinary commercial principles at cost or market value, whichever is lower. The Revenue's deemed-gift and compulsory market-valuation positions were rejected. en-us Tue, 26 Nov 2002 00:00:00 +0530 Sat, 30 Jan 2010 17:28:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=11578 Conversion of a proprietary business into a partnership, with incoming partners contributing capital and receiving profit shares linked to those contributions, does not constitute a deemed gift unless inadequacy of consideration is established for the business as a whole. Valuation cannot isolate a single asset to determine an alleged gift. Where the business continues after conversion, the dissolution-based rule requiring stock valuation at market value does not apply. Closing stock must instead be valued under ordinary commercial principles at cost or market value, whichever is lower. The Revenue's deemed-gift and compulsory market-valuation positions were rejected. Case-Laws Income Tax Tue, 26 Nov 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=11578