BOARD OF REVENUE Vs. AUTO SALES

JUDGEMENT

(1.) THIS is a reference under Section 57 of the Indian Stamp Act. The questions referred are : 1. Whether on the facts and circumstances stated above, the document Annexure-'A' is a conveyance of property, as defined in Section 2(10) of the Stamp Act ?

(2.) IF the answer to the above question is in the affirmative then, whether stamp duty will be payable on the amount of Rs. 2,14,420/- or the market value whichever is higher in terms of provisions of Art.23 Sch.I-B of the Stamp Act, as amended in U.P. ? 2. The relevant facts, which led to the making of the present reference by the Chief Controlling Revenue Authority to the High Court are these. M/s. Auto Sales was a partnership firm. It purchased certain lands in village Rangpura in 1964 under two separate sale deeds in the names of Chandra Mohan and Man Mohan. These were described as Benami transactions. The two ostensible owners relinquished their rights, title and interest in favour of M/s. Auto Sales. After relinquishment, M/s. Auto Sales made constructions. Gunjan Gupta, who was also a partner of M/s. Auto Sales withdrew from the partnership in Nov., 1969. Thereupon, the firm was reconstituted. At the time of withdrawal of Gunjan Gupta, accounts were taken and his share was determined. Gunjan Gupta was given the properties in lieu of his share, to which he was found entitled. In pursuance of this agreement, a deed purporting to be "Deed of Release" dated 25-4-1971 was executed. It is stated in this document that Gunjan Gupta would be the sole and full owner of the properties described at its foot. This included agricultural plots as well as constructions made thereon.

(3.) THE firm's argument was that since Gunjan Gupta was a co-owner in the properties of the partnership firm, therefore, the release of the properties made by the firm in his favour could not amount to a sale and hence the document was not a conveyance. THE case of the Revenue, however, was that as the properties were transferred to Gunjan Gupta in lieu of Rs. 2,14,420/-, which was payable to him by the firm, the document was a conveyance of the properties by sale.