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2004 (6) TMI 16

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....that K.G. Manoj kumar was a minor and he was admitted to the benefit of the partnership. The capital of the firm was Rs. 25,000 provided by the three partners and the minor in the proportion of Rs. 10,000, Rs. 5,000 and Rs. 5,000, respectively. Clause 7 of the deed says that the first partner will be entitled to a profit of 50 per cent, and a liability to the extent of 62.5 per cent., the second partner is entitled to a profit of 25 per cent, and a liability of 25 per cent., the third partner is entitled to a profit of 12.5 per cent, and a liability of 12.5 per cent, and the minor, K.G. Manoj kumar is entitled to a profit of 12.5 per cent. By the agreement dated April 1, 1984, clause (7) of the partnership deed was altered. By the alterati....

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....the assessee and that does not amount to a gift. On the other hand, learned counsel for the Revenue submitted that there was no consideration for the transfer and hence, it is a gift. In CGT v. D.C. Shah [2001] 249 ITR 518, the Supreme Court held as follows: "That the share of one partner is decreased and that of another partner correspondingly increased does not lead to the inference that the former had gifted the difference to the latter. The profit-sharing ratio in a firm can vary for a number of reasons, among them the ability of the partners to devote time to the business of the firm. The gift of a part of a partner's share to another partner has to be established by relevant evidence. The onus of doing so is on the Revenue". Another....