B. J. DIVAN, D. A. DESAI, P. D. DESAI, J. ( 1 ) IN this case the Chief Controlling Revenue Authority has referred the following question to us for our opinion under sec. 54 (a) of the Bombay Stamp Act 1958 Under which Article of Bombay Stamp Act the instrument dated March 31 of 1960 is chargeable with stamp duty whether it is Article 46 as claimed by the Revenue or Article 47 as claimed by the respondents or any other article ? ( 2 ) THE facts leading to this reference are as follows: On March 23 1950 Chaturbhuj alias Bachubhai Tribhovandas and Chhotalal Tribhovandas who are the two respondents in this reference and one Thakar Tribhovandas Ramji entered into an agreement of part- nership for the purpose of starting and running a business of Motor Transport Motor spare parts etc. The firm was to carry on its business in the name and style of M/s Bachubhai Tribhovandas and Company near Savarkundla in Bhavnagar district of the State. The firm carried on its business upto March 18 1960 It was decided by all the partners to dissolve the firm on certain terms and conditions. After the dissolution two of the partners viz. Chhotalal Tribhovandas the second respondent herein and Thakkar Tribhovandas Ramji ceased to have any connection with the business and after the dissolution the business of the firm was to be carried on by Chaturbhuj alias Bachubhai Tribhovandas the first respondent herein as his sole proprietary business. The partners made up the accounts between them and for that purpose they drew up the balance-sheet for the period ending with the evening of March 18 1960 ( 3 ) ACCORDING to the arrangement arrived at between the partners Thakkar Tribhovandas Ramji was given a sum of Rs. 59 498 paise in cash as his share in the assets of the firm and the amount was shown as credited in his account with the firm. Chaturbhuj alias Bachubhai Tribhovandas was given certain immovable properties and stock-in-trade belonging to the firm and the value of the assets which he got on dis- solution was Rs. 2 6 236 As against these assets given to the first respondent he undertook to discharge the liability to pay the outstanding debts of the firm and these debts amounted to Rs. 1 35 433 paise. 2 6 236 As against these assets given to the first respondent he undertook to discharge the liability to pay the outstanding debts of the firm and these debts amounted to Rs. 1 35 433 paise. The net amount thus falling to the share of the first respondent was Rs. 70 803 The second respondent was given certain immovable properties owned by the firm and those properties were valued at about Rs. 80 395 and Thakkar Tribhovandas Ramji and Chhotalal Tribhovandas thus were given properties and the first respondent got immovable properties as his share of the assets. But he also undertook to discharge the outstanding liabilities of the firm. The deed of dissolution setting out the terms and conditions of dissolution was executed on March 31 1960 and the disso- lution was to come into effect from March 18 1960 The instrument of dissolution of partnership was executed on March 31 1960 on non-judi- cial stamp paper of Rs. 18. 00. This document was impounded under sec. 33 of the Bombay Stamp Act and after hearing the respondents the Collector of Bhavnagar held that the instrument in question in addition to being a deed of dissolution of partnership was also an instrument of partition and hence was chargeable with duty of Rs. 3 444 and as an instrument of dissolution of partnership it was chargeable with duty of Rs. 15. 00 under Articles 46 and 47b respectively of Schedule I of the Stamp Act. The Collector directed the respondents herein to pay the deficit stamp duty of Rs. 3 441 together with penalty in a like amount and ordered that the total amount of Rs. 6 882 be recovered from the two respondents herein. ( 4 ) BEING aggrieved by the order of the Collector of Bhavnagar the two respondents herein applied to the Chief Controlling Revenue Autho- rity who is the applicant in the present proceedings. The applicant after hearing the two respondents substantially confirmed the views of the Collector. This order was passed by him on November 24 1961 The only modification made by the applicant in the order of the Collector was that a refund of Rs. 15. The applicant after hearing the two respondents substantially confirmed the views of the Collector. This order was passed by him on November 24 1961 The only modification made by the applicant in the order of the Collector was that a refund of Rs. 15. 00 was directed to be made to the respondents herein inasmuch as though the instrument in question was found to be both an instrument of partition and deed of dissolution of partnership and as such was chargeable with different duties under Articles 46 and 47 of Schedule I of the Stamp Act it was chargeable with the higher among the two duties and the Chief Controlling Revenue Authority on the findings recorded by the Collector confirmed those findings and held that the instrument was both an instrument of partition and instrument of dissolution of partnership and the duty with which an instrument of partition is chargeable being higher than the duty with which an instrument of dissolution of partnership is chargeable the instrument in question was liable to be charged only with the duty prescribed in Article 46 of I of the Bombay Stamp Act and therefore he directed that an of Rs. 15. 00 be refunded to the two respondents herein. ( 5 ) CERTAIN proceedings were adopted by the respondents herein by of Special Civil Application praying for certain orders directions writs but it is not necessary to refer to the contentions which were made. However ultimately in pursuance of an order passed in a petition by this High Court the Chief Controlling Revenue Authority made this reference. to this High Court and the question set out above has been referred to us for our opinion. ( 6 ) UNDER Article 46 an instrument of partition as defined by section of the Bombay Stamp Act 1958 is chargeable to the same duty as bond for the amount of the value of the separated share or shares of property. to this High Court and the question set out above has been referred to us for our opinion. ( 6 ) UNDER Article 46 an instrument of partition as defined by section of the Bombay Stamp Act 1958 is chargeable to the same duty as bond for the amount of the value of the separated share or shares of property. Sec. 2 (m) defines instrument of partition as follows: (M) instrument of partition means any instrument whereby co-owners of any divided or agreed to divide such property in severalty and includes (i)a final order for effecting a partition passed by any revenue authority or any Civil Court (ii)an award by an arbitrator directing a partition and (iii) when any partition is effected without executing any such instrument any inst- rument or instruments signed by the co-owners and recording whether by way of declaration of such partition or otherwise the terms of such partition amongst the co-owners. IT is obvious that in the instant case the document of March 31 1960 was neither a final order for effecting a partition passed by any revenue authority or any civil court not was it an award by an arbitrator directing a partition nor was it an instrument recording whether by way of declara- tion of such partition or otherwise the terms of partition amongst the co-owners. Therefore none of the three clauses of sec. 2 (m) would apply in the present case and the question that we have to ask ourselves is whether the document of March 31 1960 was an instrument whereby co- owners of any property divided or agreed to divide such property in sev- eralty. Article 47 provides that an instrument of dissolution of partnership is chargeable with stamp duty of a fixed amount namely Rs. 18. 00. ( 7 ) AS to what exactly happens when a partnership is dissolved and whether a partnership stands on the same footing as co-ownership so far as the relations of partners inter se are concerned there are several deci- sions of the Supreme Court. In CHAMPARAM CANE CONCERN V. STATE OF BIHAR AND ANOTHER. 18. 00. ( 7 ) AS to what exactly happens when a partnership is dissolved and whether a partnership stands on the same footing as co-ownership so far as the relations of partners inter se are concerned there are several deci- sions of the Supreme Court. In CHAMPARAM CANE CONCERN V. STATE OF BIHAR AND ANOTHER. A. I. R. 1963 S C. 1737 the question before the Supreme Court was when the cultivation of certain fields was jointly made on behalf of the two co-owners by a common manager and the profits arising there- from were distributed to them in proportion of their respective shares in the fields whether the arrangement could he described as a partnership or a mere co-ownership. The High Court of Bihar held that this joint culti- vation through a common manager and distribution of profits in proportion to the respective shares of the two co-owners led to the conclusion that from these circumstances the inference of partnership necessarily followed. The Supreme Court did not agree with this conclusion of the High Court of Bihar and held that it was a mere case of co-ownership. S. K. Das J. delivering the judgment of the Supreme Court observed at page 1741:two co-owners may appoint a common manager for facility of cultivation and management without entering into a partnership and the fact that the profits or even the losses are distributed in accordance with the shares of the two owners does not necessarily establish a partnership within the meaning of the Partnership Act 1932 In Lindley on Partnership (Twelfth Edition page 57) the main differences between co-ownership and co-partnership have been compared. One of the principal differen- ces is that co-ownership is not necessarily the result of agreement whereas partnership is. . . . . . The second difference is that co-ownership does not necessarily involve community of profit or of loss but partnership does. . . . . The third diffe- rence is that one co-owner can without the consent of the other transfer his interest etc. to a stranger. A partner cannot do this In a partnership each partner acts for all. In a co-ownership one co-owner is not as such the agent real or implied of the other. IN this connection it may be pointed out that under sec. to a stranger. A partner cannot do this In a partnership each partner acts for all. In a co-ownership one co-owner is not as such the agent real or implied of the other. IN this connection it may be pointed out that under sec. 4 of the Indian Partnership Act 1932 partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all and this factor of agency is one of the most important features of a partnership as distinguished from a co-ownership. ( 8 ) HAVING noted the basic points of difference between a co-owner- ship and a partnership let us now examine as to what happens when a partnership firm is dissolved. We find that on this point there are three decisions of the Supreme Court laying down the law. In NARAYANAPPA AND ANOTHER V. BHASKARA KRISHNAPPA AND OTHERS A. I. R. 1966 S. C. 1300 the Supreme Court examined the different sections of the Indian Partnership Act and described the effect of deed of dissolution. In this connection Mudholkar J. delivering the judgment of the Supreme Court observed at page 1303:from a perusal of these provisions it would be abundantly clear that whatever may be the character of the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership it becomes the property of the firm and what a partner is entitled to is his share of profits if any accruing to the partnership from the realisation of this property and upon dissolution of the partnership to a share in the money representing the value of the property. No doubt since a firm has no legal existence the partnership property will vest in all the partners and in that sense every partner has an interest in the property of the partnership. During the subsistence of the partnership however no partner can deal with any portion of the property as his own. Nor can he assign his interest in a specific item of the partnership property to anyone. During the subsistence of the partnership however no partner can deal with any portion of the property as his own. Nor can he assign his interest in a specific item of the partnership property to anyone. His right is to obtain such profits if any as fall to his share from time to time and upon the dissolution of the firm to a share in the assets of the firm which remain after satisfying the liabilities set out in Cl. (a) and sub-sec. (i) (ii) and (iii) of Cl. (b) of sec. 48. It has been stated in Lindley on Partnership 12 ed. at p. 375:what is meant by the share of a partner is his proportion of the partnership assets after they have been all realised and converted into money and all the part- debts and liabilities have been paid and discharged. This it is and this only which on the death of a partner passes to his representatives or to a legatee of his share. . . and which on his bankruptcy passes to his trustee. In paragraph 4 on page 1304 delivering the judgment of the Supreme Court Mudholkar J. quoted the following passage from Lindley on Partnership (Twelfth Edition): From the principle that a share of a partner is nothing more than his propor- tion of the partnership assets after they have been turned into money and applied in liquidation of the partnership whether its property consists of land or not must as between the real and personal representatives of a deceased partner be deemed to be personal and not real estate unless indeed such conversion is inconsistent with the agreement between the parties. . . In paragraph 5 on page 1304 the following observations have been made regarding partnership property:it seems to us that looking to the scheme of the Indian Act no other view can reasonably be taken. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property includ- ing immovable property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would therefore not be able to claim or exercise any exclusive right over any property which he has brought in much less over any other partnership property he would not be able to exercise his right even to the extent of his share in the business of the partnership. As already stated his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from partnership of the value of his share in the net partnership assets as on the date of dissolution or retirement after a deduction of liabilities and prior charges. It is true that even during the subsistance of the partnership a partner may assign his share to another. In that case what the assignee would get would be only that which is permitted by sec. 29 (1 s that is to say the right to receive the share of profits of the assignor and accept the account of profits agreed to by the partners. ( 9 ) IN Commissioner of Income Tax Madhya Pradesh Nagpur and Bhandara v. Dewas Cine Corporation A. I. R. 1968 S. C. 676 - (1868) 68 I. T. R. 240 the facts were that S. C. Sanghi and Hariprasad entered into an agr- eement to carry on business in partnership as exhibitors of cinemato- graph films in the name and style of Dewas Cine Corporation. Each partner who was an owner of a cinematograph theater brought his thea- tre into the books of the partnership as an asset of the partnership. For the assessment years 1950-51 to 1952-53 the Income-tax Officer allowed depreciation aggregating to Rs 44 380 in respect of the two theatres. The partnership was dissolved on September 0 1951 and on dissolution it was agreed between the partners that the theatres should be returned to their original owners. For the assessment years 1950-51 to 1952-53 the Income-tax Officer allowed depreciation aggregating to Rs 44 380 in respect of the two theatres. The partnership was dissolved on September 0 1951 and on dissolution it was agreed between the partners that the theatres should be returned to their original owners. In the books of account maintained by the partnership the assets were shown as taken over on October 1 1951 at the original price less the depreciation allowed -the depreciation being equally divided between the two partners. In assessment proceedings for the year 1952-53 Dewas Cine Corporation was treated as a registered firm and the ques- tion Was whether on these facts the amount of Rs. 44 380 was to be included in the total income of the assessee in the year 1952-53 under the second proviso to sec. 10 (2) (vii) of the Indian Income-Tax Act 1922 The Supreme Court relied upon its earlier decision in is. NARAYANAPPPA V. BHASKARA KRISHNAPPA (SUPRA) and held that the amount of Rs. 44/ 880. 00 was not to be included in the total income of the partnership firm. In this connection Shah J. (as he then was) delivering the judgment of the Supreme Court observed in paragraph 4 on page 678 as underunder the Partnership Act 1932 property which is brought into the partner- ship by the partners when it is formed or which may be acquired in the course of the business becomes the property of the partnership and a partner is subject to any special arrangement between the partners entitled upon dissolution to a share in the money representing the value of the property. When the two partners brought in the theatres of their respective ownership into the partnership the theatres must be deemed to have become the property of the partnership. Under sec. 46 of the Partnership Act 1932 on the dissolution of the firm every partner or his represen- tative is entitled as against all the other partners or their representatives according to their share in the property of the firm applied in payment of the debts and liabilities of the firm and to have the surplus distributed among the partners or their repre- sentatives according to their rights. Sec. 48 of the Partnership Act provides for the mode of settlement of accounts between the partners. Sec. 48 of the Partnership Act provides for the mode of settlement of accounts between the partners. It prescribes the sequence in which the various outstandings are to be applied and the residue remaining is to be divided between the partners. The distribution of surplus is for the purpose of adjustment of the rights of the partners in the assets of the partnership it does not amount to transfer of assets. (Emphasis supplied by us.)IN Dewas Cine Corporation case (supra) it was urged on behalf of the Revenue before the Supreme Court that each partner was entitled to have the assets of the partnership sold for discharging the debts and obligations of the partnership and for the purpose of dividing the residue among the partners if property is allotted to the partners in satisfaction of their claims the transaction must be deemed in law to take the form of a notional sale of the property to the partner in consideration of the money value of his share. This contention was negatived by the Supreme Court and in paragraph 6 on page 678 Shah J. observed:a partner may it is true in an action for dissolution insist that the assets of the partnership be realised by sale of its assets but wherein satisfaction of the claim of the partner to his share in the value of the residue determined on the footing of an actual or notional sale property is allotted the property so allotted to him can- not be deemed in law to be sold to himthus the Supreme Court has made it clear that what is allotted if any property belonging to the partnership is allotted to a partner on dissolu- tion is by way of adjustment or rights of partners in the assets of the partnership and such allotment of partnership property is in lieu of the money which the partner is entitled to as his share in the assets of the firm. It is only in the course of distribution of the surplus of the partner- ship assets which remains after discharging the liabilities and after going through the sequence set out in sec. It is only in the course of distribution of the surplus of the partner- ship assets which remains after discharging the liabilities and after going through the sequence set out in sec. 48 for applying various outgoings that the question arises whether the property would be sold and the net surplus distributed amongst the partners or whether instead of selling the property a particular property is allotted to a partner in lieu of his share in the surplus of the partnership assets. ( 10 ) IN COMMISSIONER OF INCOME-TAX V. BANKEY LAL VAIDYA (1971) 79 I. T. R. 594 the facts were that the respondent the Karta of a Hindu undivi- ded family entered into a partnership with D to carry on the business of manufacturing and selling pharmaceutical products and literature rela- ting thereto. On the dissolution of the partnership its assets which included goodwill machinery furniture medicines library and copyright in respect of certain publications were valued at Rs. 2 50 0 Since a large majority of the assets was incapable of physical division? it was agreed that the assets be taken over by D and the respondent be paid his share of the value of the assets in money and accordingly the respon- dent was paid Rs. 1 25 0 The question before the Supreme Court was whether the sum of Rs. 65 0 being part of the amount received by the respondent could be brought to tax as capital gains under sec. 12 of the Indian Income-tax Act 1922 The Supreme Court held that the arrangement between the partners of the firm amounted to a distribu- tion of the assets of the firm on dissolution and that there was no sale or exchange of the respondents share in the capital assets to the D; nor did he transfer his share in the capital assets and hence the sum of Rs. 65 0 could not be taxed as capital gains. The Supreme Court referred to the earlier decision in COMMISSIONER OF INCOME-TAX V. DEWAS CINE CORPORATION (SUPRA) in arriving at its decision Shah C. J. observed at page 596 of the report:in the course of dissolution the assets of a firm may be valued and the assets divided between the partners according to their respective shares by allotting the individual assets or paying the money value equivalent thereof. T4s is a recognized method of making up the accounts of a dissolved firm. In that case the receipt of money by a partner is nothing but a receipt of his share in the distributed assets of the firm. The respondent received the money value of his share in the assets of the firm; he did not agree to sell exchange or transfer his share in the assets of the firm. ( 11 ) A Full Bench of this High Court in VRAJLAL MAKANDAS VALIYA V. L. D. JOSHI COLLECTOR DIST. BHAVNAGAR (1971) 12 GLR 586= (1971) 86 I. T. R. 291 (where the case has been reported as VELO INDUSTRIES V. COLLECTOR) dealt with a question as to what happens when a partnership firm is dissolved. At the time when the Full Bench delivered the judgment in Vrajlal Makandass case (supra) on September 30 1970 and October 5 1970 the Supreme Court had not decided the case of COMMISSIONER OF INCOME-TAX V. BANKEY LAL VAIDYA (SUPRA ). That case had been decided on January 21 1971 However the Full Bench of this Court relied upon the decisions of the Supreme Court in NARAYANAPPA V. BHASKARA KRISHNAPPAS case (supra) and COMMISSIONER OF INCOME TAX V. DEWAS CINE CORPORATIONS CASE (SUPRA ). In that particular case a partner ratired from the partner- ship firm of M/s Velo Industries and when he ratired a deed was drawn up setting out the terms and conditions of retirement and the question was whether on a certain amount being paid to the retiring partner under the terms and conditions of the deed of retirement the transaction amounted to that of sale and the Full Bench held that the instrument in question in which the terms and conditions of retirement were recorded was not a conveyance within the meaning of sec. 2 (g) of the Bombay Stamp Act and the instrument could not also be said to be a deed of dissolution since it did not bring about or record any dissolution of the firm. The instrument was only an agreement or at any rate a memoran- dum of agreement relating to retirement and it was chargeable to stamp duty under Article 5 only. The Full Bench held that when a partner retires from the partnership and the amount of his? The instrument was only an agreement or at any rate a memoran- dum of agreement relating to retirement and it was chargeable to stamp duty under Article 5 only. The Full Bench held that when a partner retires from the partnership and the amount of his? share in the net partnership assets after deducting liabilities and prior charges is deter- mined on taking accounts on the footing of a notional sale of the partner- ship assets and given to him what he receives is his share in the partnership and not any price for sale of his interest in the partnership. There is in that transaction no element of sale; the retiring partner does not sell his interest in the partnership to the continuing partners and that he on the contrary carves out his interest and takes it away by evaluating it. The Full Bench pointed out that when a partner retires from the partnership and the amount of his share in the net partnership assets after deducting liabilities and prior charges is determined on taking accounts of the footing of a notional sale of the partnership assets and given to him what he receives is his share in the partnership and not any price for sale of his interest in the partnership. His share in the partner- ship is worked out by taking accounts in the manner prescribed by relevant provisions of the Partnership law and it is this and this only namely his share in the partnership which he receives in terms of money. It was pointed out that so far as this aspect of the case is concerned the observations made by the Supreme Court in Dewas Cine Corporations case (supra) and in Narayanappa v. Bhaskara Krishnappas case (supra) regarding dissolution of a partnership were equally applicable where a partner retires from the partnership firm. What is given to a partner by way of his share in the partnership whether it be cash or some property of the partnership is received by him as his share in the net partnership assets after deducting liabilities and prior charges on settlement of accounts and there is no transfer of ally interest in property from him to the con- tinuing partners nor is it for a price. It is merely an adjustment of the rights between the retiring partner and the continuing partners in the assets of the partnership; the share of the retiring partner in the partner- ship is made over to him. The decision in VECKATACHALAPANI V. STATE A. I. R. 1966 MYSORE 323 was dissented from by the Full Bench of this High Court in VRAJLAL MAKANDAS VALIYAS CASE (SUPRA ). At page 592 Bha- gawati C. J. delivering the judgment of the Full Bench observed in con- nection with Mysore High Court decision:it appears from the judgment in that case that na argument was advanced before the learned Judges based on the distinctive character or the interest of a partner in a partnership. The interest of a partner in the partnership assets was treated as if it were an interest of a co-owner in property. The learned Judges held that if the result intended to be achieved by the execution of the instrument in question was extinguishment of the rights and interest of the first party in certain special properties of the dissolved firm and corresponding augmentation of the rights and interest of the second party in consideration a certain sum of money paid to the first party there was no reason why the transaction should not be regarded as a sale of the undivided interest of the first party to the second party. This reason- ing with the greatest respect over-looks the true nature of the interest of a partner in a partnership and fails to take into account what really happens when a partner retires from a partnership and takes away either in cash or in property his share in the partnership. We cannot accept this decision as laying down the correct law and in any event in view of the decision of the Supreme Court in Commissioner of Income-tax v. Dewas Cine Corporation (supra) it must be regarded as devoid of authority. Thus the view that the interest of a partner in partnership assets is to be treated as if it was an interest of a co-owner in a property was in terms dissented from the decision of the Full Bench of this High Court in Vrajlal Makandas Valiya v. L. D. Joshi (supra ). Thus the view that the interest of a partner in partnership assets is to be treated as if it was an interest of a co-owner in a property was in terms dissented from the decision of the Full Bench of this High Court in Vrajlal Makandas Valiya v. L. D. Joshi (supra ). ( 12 ) AS a matter of fact before the Chief Controlling Revenue Auth- ority the decision in the case of VELO INDUSTRIES V VRAJLAL MAKANDAS VALIYA S CASE (SUPRA) was relied upon on behalf of the two respondents before this Court and in paragraph 9 of the statement of the case the Chief Contro- lling Revenue Authority has referred to this decision in this case of Velo Industries. We are unable to understand how inspite of his attention having been drawn to the decision in Velo Industries case (supra) the Chief controlling Revenue Authority still came to the conclusion that the matter in the instant case was not free from doubt. In our opinion there was no scope for doubt and much inconvenience to all concerned could have been avoided if the Chief Controlling Revenue Authority had appreciated properly the ratio of the decision in Velo Industries case decided by the Full Bench of this High Court. ( 13 ) THE learned Assistant Government Pleader appearing on behalf of the Chief Controlling Revenue Authority has relied on the decision of the Full Bench of Madras High Court in CHIEF CONTROLLING REVENUE AUTHORITY V. M. ABDULLA A. I. R. 1972 MAD. 2 and the Full Bench there held that while it may not be possible to predicate that every instrument of dissolution of partnership will also involve division or partition of property in specific instances the ingredients of an instrument of partition may be attracted. The Full Bench there held that where the instrument makes a division of property by allotting the wholesale business to one partner and the retail business to the other partner the instrument operates both as a deed of dissolution of partnership as well as a deed of partition and there- fore under sec. 6 of the Stamp Act the higher duty payable for a deed of partition is payable on the instrument. 6 of the Stamp Act the higher duty payable for a deed of partition is payable on the instrument. It is held that the property consisting of the wholesale and retail business has to be viewed as owned by the two partners at the time of the execution of the instrument as co-owners and that there is no inharent incompatibility between the concep- tion of co-ownership and the position of partners. The Full Bench of the Madras High Court in that case referred to the decision of the Supreme Court in Narayanappa v. Bhaskara Krishnappas case (Supra) but the decision Dewas Cine Corporation case (Supra) does not appear to have been brought attention of to the Full Bench. It may be pointed out that the relevant provision of the Stamp Act before the Full Bench of the Madras High Court defined an instrument of partition as an instrument whereby co-owners of any property divide or agree to divide such property in severalty and includes also a final order for effecting a partition passed by any revenue authority or any Civil Court and an award by an arbitrator directing a partition- The Full Bench of the Madras High Court proceeded upon the footing that the property consisting of the whole- sale and retail business was owned by the two partners at the time of the execution of the instrument as co-owners. With great respect to the learned Judges of the Madras High Court instead of ascertaining as to whether the partnership property could be said to have been held by the partners during the subsistence of the partnership as co-owners and instead of examining the legal position in connection with what happens when a firm is dissolved they straight way proceeded on the footing that during the subsistence of the partnership the properties were held by the partners as co-owners. The Full Bench of the Madras High Court also relied upon the decision of the Supreme Court in BOARD OF REVENUE V. A. P BENTHALI A. I. R. 1956 S. C. 35. There Venkatarama Aiyer J. delivering the judgment of the Supreme Court had observed that if a partnership carried on by members of a family is wound up and the deed of dissolution effects also a partition of the family properties the instrument can be viewed both as a deed of dissolution and a deed of partition. There Venkatarama Aiyer J. delivering the judgment of the Supreme Court had observed that if a partnership carried on by members of a family is wound up and the deed of dissolution effects also a partition of the family properties the instrument can be viewed both as a deed of dissolution and a deed of partition. With the greatest respect to the learned Judges of the Madras High Court we may point out that while purporting to follow the decision in Board of Revenue v. A. P. Benthali (Supra) they have overlooked that in the case mentioned by Venkatarama Aiyer J. by the very deed of dis- solution the family properties are also being partitioned amongst the members of the family. The relevant observations of Venkatarama Aiyer J. which were relied upon by the Full Bench of the Madras High Court are to this effect at page 38:though the topics covered by secs. 5 and 6 are different it is not difflcult to conceive of instruments which might raise questions falling to be determined under both the sections. Thus if a partnership carried on by members of a family is wound up and the deed of dissolution effects also a partition of the family properties as in BOARD OF REVENUE MADRAS V. ALLAGAPPA CHETTIAR A I R. 1937 MAD. 308 (FB) (A) the instrument can be viewed both as a deed of dissolution and a deed of partition and under sec. 6 the duty payable will be the higher duty as on an instrument of partition. VENKATARAMA Aiyer J. delivering the majority judgment in Board of Revenue v. A. P. Benthali (Supra) was merely referring to an instance because of the peculiar circumstances of the case where same deed effected a parti- tion and also dissolution of a partnership carried on by the members of the same family. It must be noted that what was being partitioned or what was said to be partitioned in that particular case of Madras High Court referred to in Board of Revenue v. A. P. Benthali (supra) were the family properties and not the allotment of partnership property on diss- olution of the firm. With the greatest respect to the learned Judges of the Madras High Court therefore we are unable to follow their reasoning in CHIEF CONTROLLING REVENUE AUTHORITY V. M. ABDULLA (SUPRA ). With the greatest respect to the learned Judges of the Madras High Court therefore we are unable to follow their reasoning in CHIEF CONTROLLING REVENUE AUTHORITY V. M. ABDULLA (SUPRA ). In our opinion what the legal position which ultimately emerges from Narayanappa v. Bhaskara Krishnappa (supra) Dewas Cine Corporation (supra) Commissioner of Income-tax v. Bunkey Lal Vaidya (supra) and Velo Industries (supra)is that whatever a partner gets either in the shape of money or in the shape of an immovable property which prior to the dissoltution was a property of the partnership firm is his share in the surplus of the assets of the firm which remained after the liabilities and other outgoings of the firm are provided for. There is no concept of cc-co-ownership amongst partners during the subsistence of the partnership. The partnership properties are not held by the partners as co-owners. The property belongs to the firm and it merely vests in all the partners because the firm has no legal entity. But such vesting does not mean that all the partners are the co-owners of the property. The distinction between co-ownership and partnership pointed out by the Supreme Court CHAMPARAM CANE CON- CERN V. STATE OF BIHAR AND ANOTHER (SUPRA) must be borne in mind in this connection. Moreover what happens at the time of dissolution is merely handing over to each partner his share in the surplus of the partnership assets after all the liabilities and outgoings are provided for and if any particular property which prior to the dissolution was part of the partner- ship is alloted to the partner it is merely by way of adjustment of his share in the assets of the partnership. As the Supreme Court pointed out in Dewas Cine Corporations Case (Supra) the distributor of surplus is for the purpose of adjustment of the shares of the partners in the assets and it is in the course of such adjustment that one or other property-may be moveable-may be immovable comes in the allotment to a particular partner. The concept of partition or the concept of co-owners of the property dividing or agreeing to divide such property in severalty can never apply to what happens when a firm is dissolved and one property or another is allotted to a partner. ( 14 ) ). The concept of partition or the concept of co-owners of the property dividing or agreeing to divide such property in severalty can never apply to what happens when a firm is dissolved and one property or another is allotted to a partner. ( 14 ) ). IN our opinion therefore the instrument in question dated March 31 1960 setting out the dissolution between the partners was not a deed or instrument of partition within the meaning of sec. 2 (m) and was there- fore not chargeable under Article 46 of Schedule I of the Bombay Stamp Act 1958 It was only chargeable as an instrument of dissolution of partnership. We accordingly answer the question referred to us as follows:the instrument dated March 31 1960 is chargeable with stamp duty under Article 47b and not under Article 46 nor is it chargeable with stamp duty under any other Article as no other Article which can be considered in this context has been pointed out to us. ( 15 ) THE Chief Controlling Revenue Authority will pay the costs of this reference to the respondents. .