https://www.taxtmi.com/caselaws?id=56075 Reduction of a partner's share in a firm and admission of a new partner can amount to a deemed gift where part of the partner's interest, including goodwill, is transferred without consideration in money or money's worth. The incoming partner's capital contribution, future services and loss-sharing obligation do not by themselves constitute consideration for the transfer. However, liability to gift-tax under section 4(1)(c) of the Gift-tax Act, 1958 arises only if the deemed gift is shown to lack bona fides. Where the arrangement is supported by business expediency and the record shows a bona fide commercial purpose, gift-tax is not exigible. en-us Tue, 17 Jan 1989 00:00:00 +0530 Wed, 01 Dec 2010 14:49:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=56075 Reduction of a partner's share in a firm and admission of a new partner can amount to a deemed gift where part of the partner's interest, including goodwill, is transferred without consideration in money or money's worth. The incoming partner's capital contribution, future services and loss-sharing obligation do not by themselves constitute consideration for the transfer. However, liability to gift-tax under section 4(1)(c) of the Gift-tax Act, 1958 arises only if the deemed gift is shown to lack bona fides. Where the arrangement is supported by business expediency and the record shows a bona fide commercial purpose, gift-tax is not exigible. Case-Laws Income Tax Tue, 17 Jan 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=56075