B.T. Patil & Sons vs Commissioner Of Gift Tax, Karnataka

The Supreme Court upheld the High Court's decision affirming the Tribunal's ruling that the distribution of plant and machinery by a partnership firm to its partners constituted a transfer of assets, thus triggering deemed gift tax under the Gift Tax Act. The Court clarified that such distribution is a transfer of property, rejecting the argument that it merely replaced shared interests with exclusive interests. The Court confirmed the assessment of gift tax based on the difference between the market value and the consideration charged, leading to a deemed gift of Rs. 9,50,185.