Revision Petition Order on Pending Document No. P12/2018
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued proceeding D.Dis.No. 179/P1/2022 on 20 January 2023 under the Indian Stamp Act, 1899. It modified the District Registrar, Chennai North order concerning a release deed for partnership property, rejecting its classification as a non-family settlement and classifying it as a release between family-member partners. Stamp duty was directed to be charged at 3 per cent of the market value of the whole property under release.
What the proceeding decides
Proceeding D.Dis.No. 179/P1/2022 of the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, decides a revision petition concerning pending document No. P12/2018 at the Sub Registrar Office, Konnur. The document is a release deed executed on 23 January 2018 by Mrs. C. Maheswari and Mrs. Y. Ramya in favour of Mr. C. Narendren.
The property was valued at Rs.2,68,00,014, and the document bore stamp duty of Rs.25,000. The District Registrar, Chennai North had treated it as a non-family settlement and demanded deficit stamp duty of Rs.18,51,001 and a penalty of Rs.1,999.
Why the earlier classification was changed
The property had been purchased in the name of the partnership firm M/s Guha Industries. The releasors and releasee were partners, as well as mother, daughter and son or brother.
The Chief Controlling Revenue Authority found that the document was framed as a release and that the partners had a joint interest in the partnership property. It therefore held that the District Registrar's classification of the document as a settlement was unsustainable.
The authority also rejected the petitioners' request to divide the deed into two parts, with one releasor's interest assessed under Article 55A and the other under Article 55D(i). Referring to the Supreme Court decision reproduced in the proceeding, it said each partner has an undefined beneficial interest in every property of the firm until accounts are settled and any surplus is determined.
Key provisions and practical effect
- The release deed was classified under Article 55D(i) of the Indian Stamp Act, 1899.
- Article 55D(i) covers release of rights by a partner in favour of other partners where the partners are family members, or where the property is movable property.
- Stamp duty was held payable at 3 per cent of the market value of the whole immovable property under release.
- The property could not be divided into presumed individual shares solely for applying different stamp duty classifications.
- The District Registrar, Chennai North was directed to issue a revised order.
Who may be affected
Proceeding D.Dis.No. 179/P1/2022 directly concerns pending document No. P12/2018. Its reasoning is relevant to family members executing a release of rights in immovable property owned through a partnership, particularly where one party claims to have retired from that partnership.
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Common questions
Did the authority uphold the non-family settlement classification?
No. The Chief Controlling Revenue Authority held that treating the release deed as a settlement was unsustainable and classified it under Article 55D(i) instead.
What stamp duty treatment was ordered for the release deed?
The deed was held chargeable at 3 per cent of the market value of the whole property that was the subject of the release.
Could each releasor's claimed one-third share be assessed separately?
No. The authority held that the partnership property could not be divided into presumed and earmarked individual shares for applying different classifications.
Does the proceeding state the revised deficit stamp duty amount?
No. It directs the District Registrar, Chennai North to issue a revised order based on the 3 per cent duty applied to the market value of the whole property.
