COMMISSIONER OF GIFT TAX Vs. T ABDUL WAHID

JUDGEMENT

(1.) THE questions referred to us arise out of a demand for gift-tax consequent to the reconstitution of a firm, by which reconstitution, the share of the assessee was reduced and the shares allotted to another partner who was newly inducted and to a minor to whom the benefits of the partnership was extended. THE Gift-tax Officer regarded that reconstitution effected on April 1, 1971, as resulting in a gift from the assessee to Smt. P. Fareeda Begum, who was the newly admitted partner and to the minor Mohammed Akhtar, who was admitted to the benefits of the partnership to each of whom a 10 per cent. share in the profits was allotted, as, consequent to their admission, the profit sharing ratio of the other partners was reduced. That view of the Gift-tax Officer was upheld by the Commissioner but was reversed by the Income-tax Appellate Tribunal.

(2.) THE following questions have been referred to us at the instance of the Revenue :