CHIEF CONTROLLING REVENUE AUTHORITY STAMP ACT AND THE INSPECTOR GENERAL OF REGISTRATION 120 SANTHOME HIGH ROAD CHENNAI Vs. SAROJINI MUTHUSAMY

JUDGEMENT

(1.) THE Chief Controlling Revenue Authority (Stamp Act) has made a reference under Section 57(1) of the Indian Stamp Act, 1899 and sought a clarification regarding classification of the document in question and chargeability to stamp duty.

(2.) THERE is a firm, by name, M/s. Lakshmi Spinners constituted under the Indian Partnership Act, 1932 and M/s. Sampurna Spinning Mills Ltd. was admitted as a partner on 22.10.1986 and the profit sharing ration as well as capital investment was arrived at as under:- Tmt. Sarojini Muthusamy 25% Rs. 1,81,250.00 Tmt. Vasantha Valayutham 25% Rs. 1,81,250.00 Tmt. Mallammal 20% Rs.1,45,000.00 Tmt. Amirtham 10% Rs.72,500.00 M/s. Sampurna Spinning Mills 20% Rs.1,45,000.00

(3.) THE submission of the learned Government Advocate is that the value of the property allotted in favour of M/s. Sampurna Spinning Mills was much more than the value of the properties allotted to other partners and therefore it is a colourable transaction. However, we are unable to accept the submission of the learned Government Advocate, as M/s. Sampurna Spinning Mills Ltd. was not only allotted assets at the time of dissolution of the firm, but the said company was also made solely responsible to discharge all the liabilities of the erstwhile firm existing on the date of dissolution or future liability if any that may arise in future. Hence, on the facts of the case, the document cannot be considered to be a device to convert the personal properties of the other erstwhile partners in favour of M/s. Sampurna Spinning Mills Ltd. It is a case where the existing partners decided to dissolve the firm and divided the properties by way of a deed of dissolution. When the partnership firm was dissolved, the partners are entitled to the benefits that flow from it. Hence, the deed cannot be regarded as a deed to convey or transfer their interest in the properties in favour of M/s. Sampurna Spinning Mills Ltd. The deed in question, in our opinion, should be classified only as a deed of release. Since the respondents have paid the duty on the basis that the document in question is a deed of partition. It is not necessary to refund the excess amount collected, if any. Our answer to the question is that the document in question should be classified and treated as a released deed.