( 1 ) THIS is a reference made by the Income-tax Appellate Tribunal under Section 26 of the Gift Tax Act, 1958. At the instance of the revenue, the following question is referred for the opinion of this Court in respect of assessment year 1975-76:-"whether, on the facts and in the circumstances of the case, the assessee was liable to Gift-tax under the Gift-tax Act, 1958?"

( 2 ) WE have heard Mr. B. B. Naik learned counsel for the revenue and Mr. M. J. Shah learned counsel for the respondent-assessee.

( 3 ) THE assessee along with five others including assessees brother was carrying on business in the name and style of M/s. Abadi and Co. under partnership deed dated 10-4-1971. The assessee had 22% share in the said firm while his brother had 15% share. As the assessee wanted to be a qualified Chartered Accountant, he retired from the said firm on 26-10-1973 i. e. at the end of S. Y. 2029 after withdrawing his capital from the firm. A new deed of partnership was executed on 16-11-1973 to carry on business w. e. f. 27-10-1973 i. e. the first day of S. Y. 2030. In the new firm, the assessees mother became a partner with 17% share while the share of the assessees brother w