AIR 1999 KARNATAKA 389 ::1999 (3) KantLD 661 ::(1999) ILR (Kant) 2022 ::2000 (1) KantLJ 39

Karnataka High Court

Hon'ble Judge(s): R. V. Raveendran , J

(A) Karnataka Stamp Act (34 of 1957) , Sch, Art.40B(b)— Dissolution of partnership firm - Deed is chargeable to stamp duty under Art. 40B(b) and not under Art. 40B(a). In the instant case the property has been purchased by the firm by way of sale deed in name of 18 partners and two minors admitted to the benefits of partnership. The purchase was not by said twenty persons in their individual capacity, as co-owners. The sale price and the stamp duty has been paid from the funds of the firm and katha has been transferred to the name of the firm and the taxes are being paid by the firm and the property has been shown as the property of the firm. Therefore, it could be said that such property was treated as the property of the firm. In fact the subsequent dissolution deed clearly recites that the said property was the property of the firm. Therefore, on dissolution different portions of the property could be allotted to the 18 partners and 2 minors admitted to the partnership. As the property was purchased after the commencement of partnership by twenty persons and treated as the asset of the firm, and as the allotment of different portions of the property is to the very persons who earlier held it as co-owners, the deed of dissolution would fall under Art. 40B(b) and not under Art. 40B(a). Art. 40B(a) will not apply as this is not a case where 'X' contributes t....