TMI Blog1987 (11) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... h M. Dayanandan under a partnership deed dt. 30th June, 1966 carrying on business in the name of National Company having 50per cent share therein. On 1st July, 1974 the partnership was re-constituted by inducting two other partners. Smt. Chandra and Smt. M. Shanthi, the two married daughters of the assessee. Consequently, the share of the assessee was reduced to 40per cent. The partnership deed al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined the net worth of the firm at Rs. 14,87,397 and concluded that the assessee has abandoned 1/10th of the right therein in favour of the incoming partners and there was deemed gift of Rs. 1,48,740. Thus he made a gift-tax assessment for a total sum of Rs. 4,93,990. 3. On appeal, the CGT(A) was of the view that the assessee could have some relief in respect of the deemed gift relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Madras High Court in the case of CGT vs. Indo Traders and Agencies (Madras) Ltd. (1981)131 ITR 313(Mad) that in order to deem a gift under s. 4(1)(A) the Revenue must first establish that the transfer was otherwise than for adequate consideration before the difference between the consideration and the market value could be added as a gift. The mere fact that the market value of the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partners and they have also taken the liability to share the loss apart from contributing their own capital of Rs. 50,000 each and also putting in their efforts in the business. In fact, the firm has run into losses which the new partners have shared. The reduction in the share of the assessee goes hand in hand with reduction of his liability to bear the loss and the reduction can only refer t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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