Tax liability if brothers relinquish respective share

If you declare everything the way you have declared here in your tax returns, the taxman will suspect a nexus among the three transactions and compute your tax accordingly. If you do not declare them or only declare them partially in a manner to reduce or evade tax you can be prosecuted for evasion of tax. Your relinquishments will come under tax laws for exchange of property.  Taxman will see a nexus between the so called gift and the difference in price between the propeties relinquished/exchanged.

If you partially disclose in your returns you are taking a chance and a risk.

The net effect if found out or suspected could be viewing the cash gift as a capital gain on relinquishment of the costier portion of the 2 flats.