COMMISSIONER OF GIFT TAX Vs. P VIJAYAKUMAR REDDY

JUDGEMENT

(1.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in cancelling the gift-tax assessment holding that there was no gift involved in the reduction of share to the existing partner on the induction of new partners to the firm ?

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in holding that the fresh capital brought in by the new partners on their agreeing to work for the firm and to share not only the profits but also the losses of the firm would constitute adequate consideration for the assessee's relinquishment of his share in the profit and loss of the firm ?

(3.) THOUGH in this case, it cannot be said that there is any adjustment as there is no retirement, and there can indeed be a transfer when an existing partner gives away his or her rights to the other partners newly inducted or continuing, the finding of fact recorded by the Tribunal is that there was consideration for the transfer and that consideration cannot be said to be inadequate. The questions referred are, therefore, answered against the Revenue and in favour of the assessee.