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2000 (9) TMI 68 - SC - Income TaxWhether no element of gift was involved when the assessee retired from the firms in which he had been a partner ? Held that:- When a partner retires from a partnership, the partnership continues. The assets and the goodwill of the firm continue to remain the assets and the goodwill of the firm. All that the retiring partner gets is the value of his share in the partnership assets less its liabilities. It cannot, in such circumstances, be held, assuming that the retiring partner received less than what was his due, that the difference was something that he had transferred to the continuing partners within the meaning of "transfer of property" for the purposes of the Gift-tax Act or that there was a gift liable to gift-tax. The word "settlement" in the definition of "transfer of property" in the Gift-tax Act takes colour from the context of the definition and its neighbouring words and means a settlement upon trust and not a settlement of accounts. Therefore, that the view taken by the Appellate Assistant Commissioner, the Tribunal and the High Court was the right view. Appeal dismissed.
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