1. The Board of Revenue which is the Chief Controlling Revenue Authority has posed the following questions for our consideration:
'1. Whether the document dated 1-4-1964 is a simple 'deed of partnership' or
2. Whether it is both a 'partition' and 'partnership' as adjudicated by the D.I.G. Visakhapatnam.'
2. The facts leading to this reference are these: During the course of inspection of records of the Income Tax Office, Srikakulam, 'A' Ward the Deputy Inspector General of Registration and Stamps, Visakhapatnam, came across a document which in his view was insufficiently stamped, and therefore he impounded it and levied a stamp duty of Rs. 1,695/- and penalty of Rs. 5/- thereon. Aggrieved by the order of the D.I.G. , Registration and Stamps, the executants of the document preferred a revision to the Board of Revenue. The Board considered the matter and on the request of the petitioner before the Board, referred the matter by formulating the above questions. The document under consideration was executed on 1-4-1964 as a partnership deed and bears a non-judicial stamp of Rs. 40/-. It was filed by the partners in the Income tax Department obviously for registration of the firm for purposes of income tax. The relevant portion is to be found in the preamble of the document and is as follows:-
'That whereas we constitute a Hindu undivided family, party No. 1 being father and parties 2 to 6 are the sons of No. 1 and we are carrying on business at Srikakulam in (1) cloth in wholesale in the name of Mr. V. Pandurangamurthy. (2) Mettur cloth in retail in the name of M. Rama Rao and also the family owns 1/2 share in the cinema business under the name and style of Sri Rama Krishna Theatre in Srikakulam. That we have agreed to partition our business on 31-3-1964, and actually we have divided the same and agreed to continue the business, under a partnership firm duly succeeding the assets and liabilities of the former joint family business in cloth (wholesale and retail) as on 31-3-1964 and this deed partnership is executed on the following terms and conditions:-'
The circumstances which prevailed upon the Revenue Authority to treat this document both as a deed of partnership and a deed of partition, were that there was no time-lag between the partition and the coming into existence of the partnership; hence the document was the only evidence to prove the severance of the joint family status.
3. Before we proceed to consider the preamble to the document, it would be necessary, in our opinion, to state the principles of Hindu Law dealing with partition. According to those principles, it is now well settled that all that is required to constitute a severance in status is a definite and unequivocal intention of a member of a joint family to separate himself from the family to the knowledge of the persons affected. The intention to separate may be by explicit declaration or by conduct. Thus it would be seen that even a mere declaration of partition by one member of a joint family is enough to sever the joint family status keeping this principle in mind, when the relevant portion of the document in question is perused, there can be no doubt that the parties did not intend to partition the property by means of the document in question. The preamble quoted above would go to show that no partition was being effected by the document in question. It only declares that a partition of the joint family business has been effected a day before i.e., on 31-3-1964 and those very assets which once formed part of the joint family business were brought into the partnership as the capital of the firm. The declaration in the preamble to the document that the parties have agreed to partition their business on 31-3-1964 and have actually divided, the family business assets on that day would go to show the severance of status had already taken place before the document in question was executed. Moreover the fact that nowhere in the operative portion of the document anything is mentioned about the partition being given effect to by this document, would fortify our view that partition is not taking place and under this document.
4. We are, therefore of the opinion that the document in question is only a partnership deed and as such is sufficiently stamped. It is not a partition deed and, therefore, the first question is answered in the affirmative. Hence the reference is answered accordingly. No costs. Advocate's fee Rs. 250/-.
5. Answer accordingly.