Mere instance of reduction in shares of profit of a partner resulting in increase in share of profit of another by itself will not constitute a ‘gift’

Commissioner Of Gift Tax Vs. Smt. Bindu Joseph (Kerala High Court) it is quite clear that a mere instance of reduction in the shares of profit of a partner resulting in increase in the share of profit of another by itself will not constitute a ‘gift’ coming within the purview of section 4 (1) (a) of the Act. The Apex Court held that the contribution of Rs.25,000/- made by the newly inducted partner in Sree Narayana Chandrika Trust’s case [cited supra] and the undisputed usefulness of her service to the firm was considered as adequate consideration, to take it outside the purv...