https://www.taxtmi.com/caselaws?id=16305 A partner's contribution of personal property to a firm as capital is treated as a transfer in the limited sense that exclusive ownership is converted into a shared partnership interest, but that alone does not attract gift-tax under section 4(1)(a) of the Gift-tax Act. The provision applies only where the transfer is for inadequate consideration, and the book credit in the firm's accounts is not the true consideration because the partner receives reciprocal partnership rights whose value cannot be precisely ascertained at the time of transfer. In the absence of a specific deeming rule, the credited amount cannot be used to prove inadequacy of consideration or to quantify a deemed gift. en-us Fri, 13 Mar 1998 00:00:00 +0530 Sat, 05 Sep 2009 17:58:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=16305 A partner's contribution of personal property to a firm as capital is treated as a transfer in the limited sense that exclusive ownership is converted into a shared partnership interest, but that alone does not attract gift-tax under section 4(1)(a) of the Gift-tax Act. The provision applies only where the transfer is for inadequate consideration, and the book credit in the firm's accounts is not the true consideration because the partner receives reciprocal partnership rights whose value cannot be precisely ascertained at the time of transfer. In the absence of a specific deeming rule, the credited amount cannot be used to prove inadequacy of consideration or to quantify a deemed gift. Case-Laws Income Tax Fri, 13 Mar 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=16305