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TMI Blog1990 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 26(1) of the Gift-tax Act, 1958 (for short, the "Act"), at the instance of the Revenue. The Tribunal has referred the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was not liable to pay gift-tax ?" The non-applicants, Vinod Kumar Agrawal and Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sees was allowed by the Appellate Assistant Commissioner of Gift-tax by holding that the reducing of the sharing ratios of the assessees did not constitute a gift, on the basis of two decisions of the Bombay and Karnataka High Courts respectively in CG T v. J. N. Marshall [1979] 120 ITR 613 and D. C. Shah v. CGT [1982] 134 ITR 492. The second appeal preferred by the Revenue was dismissed by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the appellate order of the Appellate Assistant Commissioner of Income-tax as forming part of the statement of case, it does show that, according to the agreement of partnership, Shri Ashok had contributed a sum of Rs.52,850 towards his share capital and Shri Sharad was taken into the partnership as a working partner. It would, thus, appear that Ashok and Sharad were not given shares in the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gift under that section." In the present case, transfer of 20% share to each of the two new partners cannot be said to be transfer of property made voluntarily and without consideration. As pointed out earlier, the consideration paid by Ashok was his-contribution towards the partnership capital and that by Sharad was his agreement to work for the partnership business as a working partner. For al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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