Mohammed, J.

This is a reference under Section 26(1) of the Gift-Tax Act at the instance of the Commissioner of Gift-tax, Trivandrum. The questions of law referred by the Income-tax Appellate Tribunal, Cochin Bench to this court for decision is extracted below:

" Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in finding dial the transfer in question has not resulted in any gift assessable to gift-tax in the view that the capital brought in by the incoming partners can be taken as consideration for the transfer of 65% of the assessee's interest in the business?"

2. The facts which are necessary for deciding the reference are summarised thus: The assessee was the proprietress of a trading concern known as 'M/s Gunbow Trading Company ' doing business in coir products. In the year 1979 the said establishment was transformed into a partnership firm, the assessee continuing as one of the partners. The other partners are her two major daughter and her husband in his capacity as trustee of a trust called' Krishnadev Trust'. Three minor daughters of the assessee and two minor children of two married daughters are the beneficiaries of the t