https://www.taxtmi.com/caselaws?id=18884 On reconstitution of a partnership firm, reduction in an existing partner's share to admit new partners who contribute capital and strengthen the business is not, by itself, a taxable gift under the Gift-tax Act. Goodwill forms part of the firm's assets, and a partner's interest may extend to it, but a transfer is a gift only if it is voluntary and without consideration. The Revenue must prove absence of consideration, and where the incoming partners provide capital and business support, the reduced share is supported by consideration in money's worth. The reduced partnership interest was therefore not a gift and no gift-tax liability arose. en-us Wed, 08 Mar 1995 00:00:00 +0530 Mon, 02 Nov 2009 15:51:06 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=18884 On reconstitution of a partnership firm, reduction in an existing partner's share to admit new partners who contribute capital and strengthen the business is not, by itself, a taxable gift under the Gift-tax Act. Goodwill forms part of the firm's assets, and a partner's interest may extend to it, but a transfer is a gift only if it is voluntary and without consideration. The Revenue must prove absence of consideration, and where the incoming partners provide capital and business support, the reduced share is supported by consideration in money's worth. The reduced partnership interest was therefore not a gift and no gift-tax liability arose. Case-Laws Income Tax Wed, 08 Mar 1995 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=18884