Legal Reference Library

The facts relating to the market value as on the date of agreement to sale and as on the date of sale deed is not disputed. The only dispute is whether the stamp duty value as on the date of agreement to sale or sale deed to be considered for the purpose of computation of capital gain. The purpose of introducing section 50C of the Act was to counter suppression of sale consideration of sale of immovable properties. Before insertion of section 50C of the Act to the statute, there are lot of litigations as to consideration shown in document conveying title and payment of stamp duty. To overcome the litigations, the provision of section 50C of the Act has been inserted to the statute w.e.f. 1.6.2003 wherein it is made mandatory to adopt value u/s 50C of the Act for the purpose of determination of consideration. A proviso to section 50C of the Act has been inserted by the Finance Act, 2016 w.e.f. 1.4.2017 to resolve the genuine and intended hardship, in the case in which the date of agreem...

A three judge bench of the Hon'ble Bombay High Court (Bombay HC) in a recent judgment in the matter of Chief Controlling Revenue Authority, Maharashtra State, Pune and Superintendent of Stamp (Headquarters), Mumbai v Reliance Industries Limited, Mumbai and Reliance Petroleum Limited, Gujarat1 has held that orders in case of a scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (Act) involving different High Courts in multiple states, are separate instruments in themselves. Accordingly, stamp duty would be payable on all the orders (and consequently, all the states) without the benefit of remission, rebate or set-off. Brief facts Reliance Industries Limited (RIL), having its registered office in Maharashtra and Reliance Petroleum Limited (RPL), having its registered office in Gujarat entered into a scheme of amalgamation under Sections 391 to 394 of the Act, pursuant to which the entire undertaking of RPL was proposed to be merged into RIL. The Act r...

A two judge bench of the Supreme Court of India in Chief Controlling Revenue Authority v. Coastal Gujarat Power Ltd. (Civil Appeal No. 6054 of 2015 arising out of S.L.P. (C) No. 32319 of 2013) has set aside an order passed by the High Court of Gujarat on 3 December 2012 in Stamp Reference No. 1/2011, holding that a mortgage deed with security trustee to secure loans of multiple banks would be treated as distinct transactions and would be liable for stamp duty as if separate mortgage deeds were recorded for each bank (Supreme Court Judgment). The High Court had observed that the stamp duty is payable on the instrument and not the transaction. As per the High Court the instrument was a mortgage deed between a borrower (mortgagor) and a security trustee (mortgagee). It was the security trustee alone who had the power to enforce the mortgage and not the banks. The High Court observed that Section 5 cannot be construed to empower the State to levy duty on the transaction as opposed to the...