D.Dis.No. 24622/P1/2021, Revision Petition on Pending Document No. P508/2020
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No. 24622/P1/2021 on 19 September 2023 to examine a stamp duty revision petition concerning a settlement deed from parents to their sons. The proceedings state that the property must be treated as an asset of a partnership firm rather than the absolute property of the parents, supporting its classification as a non-family settlement and the demand for deficit stamp duty and penalty.
What the proceedings concern
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, considered a revision petition under the Indian Stamp Act, 1899. The petition challenged an order of the District Registrar, Chennai South, relating to pending Document No. P508/2020 at the Joint 1 Chennai South Sub Registrar Office.
The document was a settlement deed executed on 9 November 2020 by Mr. S.V. Rangaparthasarathy and Mrs. S. Radha, also known as Radhalakshmi, in favour of their three sons. It covered one third undivided share for each son.
Property and stamp duty details
Key details recorded in D.Dis.No. 24622/P1/2021 are:
- Property value: Rs.1,09,62,320.
- Stamp duty borne by the document: Rs.25,000.
- Deficit stamp duty determined by the District Registrar: Rs.22,77,090.
- Penalty determined: Rs.2,910.
- Classification used by the District Registrar: non-family settlement under Article 58(a)(ii) of the Indian Stamp Act, 1899.
Why the property was treated as partnership property
The property had originally been purchased jointly by Mrs. Andal, Mrs. Radha and Mr. K. Seshadri. It was later shown as an asset of Unitech Engineering Industry, a partnership firm. Shares were subsequently released to Mr. S.V. Rangaparthasarathy and Mrs. Radha, and the partnership was dissolved through an unregistered deed dated 2 November 2020.
The petitioners argued that the property had only been used by the partnership on lease and had never been transferred to the firm. The authority rejected that reasoning because the settlement deed itself described the property as an asset of the partnership firm. It also stated that bringing immovable property into a firm does not require a registered transfer document.
Effect on the settlement deed
D.Dis.No. 24622/P1/2021 states that partnership assets remain firm assets for settling accounts after dissolution. It also relies on a Madras High Court decision stating that property settled must be the settlor's absolute property to qualify as a family settlement. Because the property was treated as belonging to the firm, the parent and son relationship did not by itself make the deed a family settlement.
The supplied text ends while discussing the resulting classification and does not reproduce a separate final operative direction.
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Common questions
Why was a settlement from parents to sons treated as a non-family settlement?
The authority found that the property belonged to the partnership firm and was not the parents' absolute property. It therefore concluded that the family relationship alone could not make the deed a family settlement.
What deficit stamp duty and penalty were demanded?
The District Registrar demanded deficit stamp duty of Rs.22,77,090 and a penalty of Rs.2,910.
Did the absence of a registered transfer to the partnership change the authority's view?
No. The authority stated that bringing immovable property into a partnership firm does not require registration of a document, and the settlement deed itself described the property as a firm asset.
Does dissolution of the partnership automatically make the property the personal property of the former partners?
According to these proceedings, no. The authority stated that partnership assets continue to be treated as firm assets for settling accounts and dividing any residual property after dissolution.
