https://www.taxtmi.com/caselaws?id=35731 A reconstitution of a partnership on admission of new partners or retirement of existing partners does not, by itself, create a taxable gift under the Gift-tax Act. The High Court held that the partnership deed must be read as a whole and it is impermissible to isolate a reduction in one partner's share and infer a transfer to another. A taxable gift requires proof of a transfer of property without adequate consideration, and the revenue failed to establish that on the facts. Capital contribution by incoming partners and their obligation to participate in the business were treated as adequate consideration. The reallocation of profit-sharing ratios was therefore not a gratuitous disposition. en-us Wed, 10 Dec 1980 00:00:00 +0530 Tue, 16 Mar 2010 13:19:28 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=35731 A reconstitution of a partnership on admission of new partners or retirement of existing partners does not, by itself, create a taxable gift under the Gift-tax Act. The High Court held that the partnership deed must be read as a whole and it is impermissible to isolate a reduction in one partner's share and infer a transfer to another. A taxable gift requires proof of a transfer of property without adequate consideration, and the revenue failed to establish that on the facts. Capital contribution by incoming partners and their obligation to participate in the business were treated as adequate consideration. The reallocation of profit-sharing ratios was therefore not a gratuitous disposition. Case-Laws Income Tax Wed, 10 Dec 1980 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=35731