The following question has been referred under clause (1) of section 64 of the Estate Duty Act: “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the conversion of the sole proprietary business of Shri J. P. Chaliha, the deceased, into a partnership business styled 'Korangani and Azizbagh Tea Estate' by taking his wife and his two sons as partners by allowing l/4th share to each of the said partners by partnership deed dated 2. 8. 62 amounts to a gift and thereby upholding the inclusion by the Assistant Controller of Estate Duty the entire difference of the market value and the book value of the assets of the firm, M/S. Korangani and Azizbagh Tea Estate amounting to Rs. 6,45,459/- dutiable as part of the estate of Shri J. P. Chaliha, the deceased, under sections 5 and 10 of the Estate Duty Act, 1953” The reference relates to the estate of Jadav Prasad Chaliha. He was a planter manufacturer and a tea merchant. He was the sole proprietor of business styled as M/S. Korangani and Azizbagh Tea Estate. He converted the sole proprietary business into a partner­ship business on August 2, 1962 in that firm his two sons Indrajit and Ranjit his spouse Debabala were admitted to benefits of the partnership firm. Each of the three person brought Rs. 2,000/-in all Rs. 6,000/-was contributed by three of the partners. The four partners -were declared to be four equal share holders. Ranjit Chaliha agreed to devote his time to the firm. He was to be paid Rs. 1250/-a salary for three years, Rs. 1.500/-for the next three years and in the succeeding three years Rs. 1750/-. Ranjit and Debabala agreed to devote attention to the business and perform all that as may be required of each of them for business of the firm, Jadav Prasad Chaliha died on June 15, 1964. The accountable persons submitted returns under the Estate Duty Act, 1953. The net value of the estate was assessed Rs. 20,74,036/-and the tax demanded was Rs. 6,91,262/-. Aggrieved thereby an appeal was filed before the Appellate Controller of Eastern Zone, Dibrugarh interalia it was urged that by reason of conversion of sole proprietary business there was no gift made by the deceased. The contention did not succeed. The net value of the estate was assessed Rs. 20,74,036/-and the tax demanded was Rs. 6,91,262/-. Aggrieved thereby an appeal was filed before the Appellate Controller of Eastern Zone, Dibrugarh interalia it was urged that by reason of conversion of sole proprietary business there was no gift made by the deceased. The contention did not succeed. The contention was repeated before the Income Tax Appellate Tribunal at Gauhati in further appeal without any success. Finally at the instance of the accountable persons the question is referred to this Court. Whether the conversion of the sole proprietory business by the deceased of Korangani and Azizbagh Tea Estates resulted a gift in law and whether the three partners were donees is the first question that arises in the case. We see Ranjit had agreed to devote entire time for the business of the firm. Indrajit and Debabala agreed to devote attention to the work of the partnership firm as is required of them to do. Whether these factors form consideration. If so it is obvious there is no gift under the laws of the country. The case in (1969) 74 ITR 343 (CGT vs. Karnaji Lumbaji (Guj) and 113 I R 574 (Addl. Commissioner of Gift Tax, Madras vs. A. A. Annamalai Nadar) were cited on behalf of accountable person to support the contention. It is seen in the later case major son was taken as partner of the firm by the aged father. The major son agreed to render service and that agreement was held to be con­sideration to hold there was no -gift involved in the case. The Madras High Court in that case held-"The Tribunal was right in its view that there was adequate consideration for the conversion of the business into a partnership business therefore there was no gift in the case of the major son." A similar conclusion was drawn in 115 ITR page 89 (Controller of Estate Duty, Bombay vs. Kantilal Nemchand) where the proprietary business was converted into partnership business. The father relinquished his rights, shuffled the property and converted it to a firm in that his son was taken as a partner. He agreed to devote time for the business of the firm and it was held there was consideration in the view there was no gift. In the instant case the three partners agreed to devote attention therefore there was consideration. He agreed to devote time for the business of the firm and it was held there was consideration in the view there was no gift. In the instant case the three partners agreed to devote attention therefore there was consideration. Therefore, there was no gift involved when the three were inducted into the firm on the day when the deed was executed by all the four of them. The next question arises as to the application of section 9 or lection 10 of the Estate Duty Act of 1953. The deed was executed on August 2, 1962 and the death of the estate holder occurred on June 15, 1964 more than two years after therefore section 9 has no application. The revenue authorities applied section 10 in the instant case. We see two cases of Australia decided by the Privy Council one in (1934) AC 61 (PC) (Murro vs. Commissioner of Stamp Duties) and the other is (1958) AC 435 (Clifford John Chick vs. Commissioner of Stamp Duties of New South Wales) were followed for many years by the Courts in India. A significant departure was made in the case of 88 ITR 448 SC (CFD vs. Ramchandra Gounder). After a gift was made donees when invested the gifted property in the partnership the Supreme Court held section 10 did not apply. The Privy Council cases were to be followed the decision and conclusion would have been different in Gounder's case and that case was followed in 91 ITR page 1 (CED vs. Ramarathnam), 120 ITR page 456 (Kamalavari and CED vs. Jaigopal Mehra) and 158 ITR 683 (CED vs. Godavari Bai). All these cases are referred and approved in 172 ITR 413 (N. K. Sanghi vs. Controller of Estate Duty, Rajasthan.) This part of the decision is really not necessary in the instant case as it is held there was no gift involved when the partnership deed was executed on August 2, 1962 but is adverted to as there was discussion touching on this aspect of the case. The first part of the question is answered in the negative in favour of the assessee and against the revenue. In view of the answer to the first part there is no necessity to answer as regards escalation of the value of the assets of the firm amounting to Rs. 6,459,45/-. No costs.