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        Stamp Duty
 
     
1.   In whose name should the stamp paper be purchased? Can the client exercise the document on a stamp paper purchased by an Advocate?
 
 
2.   What should be the procedure of payment of stamp duty if the document has not been adequately stamped and had been executed about three months ago? What is the position if the document has been executed one year ago?
 
 
3.   Can one obtain refund if the agreement has not been signed and the parties have paid the stamp duty?
 
 
4.   In case of resale of the flat who has to pay the stamp duty, the purchaser or the seller?
 
 
5.   As regards the payment of stamp duty is the Law of Limitation applicable to the purchase of flat in a Co-operative Society?
 
 
6.   Will Stamp Duty have to be paid if there is a deed of family settlement and a flat is transferred amongst family members?
 
 
7.   Will Stamp Duty have to be paid if the flat is gifted by a Donor?
 
 
8.   Will Stamp Duty have to be paid as on a conveyance in case of resale of flat, if the document has been executed prior to 10-12-1985 the vendor has not handed over possession of the flat to the purchaser?
 
 
9.   Is the decree of final order of a civil court by which immovable property is transferred be liable to be stamped as a Conveyance?
 
 
10.   Are orders made by the High Court under Section 384 of the Companies Act, 1956 in respect of amalgamation of companies be liable for payment of stamp duty as on a Conveyance?
 
 
11.   What are the important judgements which refer to determination of market value?
 
 
12.   What are the consequences of under valuation of document?
 
 
13.   In a welfare society what should be the approach of a common man or an assessee while paying the Stamp Duty?
 
 
14.   A flat has been purchased for Rupees Eighty lakhs after filing Form No. 37-I. Can the stamp authorities contend that the market value of the said property is Rupees Eighty Five Lakhs?
 
 
 
     
 
In whose name should the stamp paper be purchased? Can the client exercise the document on a stamp paper purchased by an Advocate?
 
 

As per Sec. 34 of the Bombay Stamp Act, the stamp papers should be in the name of one of the parties who has signed the documents. Therefore, the stamp paper should be purchased in the name of one of the parties who would be signing the instruments. If the stamp paper has been purchased in the name of an Advocate, C.A., etc. then such instrument shall be treated as an instrument not duly stamped and shall be inadmissible in evidence.

 
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What should be the procedure of payment of stamp duty if the document has not been adequately stamped and had been executed about three months ago? What is the position if the document has been executed one year ago?
 
 
The applicant should apply to the Collector under Sec. 40 of the Bombay Stamp Act and should submit the original agreement with two xerox copies of the same. The applicant should also give reasons why he could not pay the stamp duty before the execution of the document. In all such cases the Collector may not impound the document and might instead of proceeding under Sec. 33 and / or Sec. 39 of the Bombay Stamp Act may proceed to rectify the same as per the provision of Sec. 41 of the Bombay Stamp Act. The Collector can recover the stamp duty amount under Sec. 40 and can endorse the instrument as per Sec. 41 of the Bombay Stamp Act and shall certify that proper stamp duty has been paid. On such endorsement the document shall be admissible in evidence and may be registered and acted upon and the authenticated as if it has been duly stamped and shall be delivered to the person who produced the document. If the document has been executed one year ago then the collector will impound the document and shall proceed under Section 33 and / or Section 39 of the Bombay Stamp Act. The penalty previously was from Rs. 5/- to an amount not exceeding ten times the amount of the proper duty. However now as per the recent amendment 2% penalty per month will be levied by the authorities.
 
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Can one obtain refund if the agreement has not been signed and the parties have paid the stamp duty?
 
 
When one person possessing stamp or stamps in his possession which have been spoiled or rendered unfit or unless for the parties intended or the person does not require immediate use of the said stamps then such person should deliver the above said stamps to the Collector. The person has to make an application under Sec. 52 of the Bombay Stamp Act and the person should also submit the affidavit mentioning the reasons for which the stamps had been purchased and the reasons why the refund application is being made. If the applicant can convince the Collector then refund of the stamps could be obtained only if : The application is made within six months from the date of the purchase of stamps. The Stamps should have been purchased by such person with a bonafide intention. None of the parties should have signed the paper on which the stamps have been fixed. On receipt of such application, the Collector is empowered to refund to the said person the value of said stamp deducing there from said amount as prescribed by the competent authorities.
 
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In case of resale of the flat who has to pay the stamp duty, the purchaser or the seller?
 
 
The parties can themselves decide who shall pay the stamp duty. If nothing is mentioned in the agreement then as per Section 30 of the Bombay Stamp Act if the transaction relates to resale of flats then the stamp duty will have to be paid by the purchaser.
 
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As regards the payment of stamp duty is the Law of Limitation applicable to the purchase of flat in a Co-operative Society?
 
 

Cataract is an opacity or clouding of the lens inside the eye, thereby distorting the light as it enters the eye. Cataract is often confused with pterygium but cataract cannot be seen on the surface of the eye.

 
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Will Stamp Duty have to be paid if there is a deed of family settlement and a flat is transferred amongst family members?
 
 
Yes, As per the provisions of Bombay Stamp Act, Stamp Duty will have to be paid on a deed of Family Settlement.
 
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Will Stamp Duty have to be paid if the flat is gifted by a Donor?
 
 
Yes, Stamp Duty will have to be paid if the flat is gifted by a Donor.
 
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Will Stamp Duty have to be paid as on a conveyance in case of resale of flat, if the document has been executed prior to 10-12-1985 the vendor has not handed over possession of the flat to the purchaser?
 
 
No. The Stamp Duty will not have to be paid as on a conveyance if the transaction has occurred prior to 10-12-1985. It will not make any difference if the possession has been transferred by the agreement to sale executed prior to 10-12-1985. The Chief Controlling Revenue Authority has also given the same view in the case of Bank of Maharashtra, Bombay v/s. Superintendent of Stamps. Bombay in Appeal Number S22 of 1990.
 
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Is the decree of final order of a civil court by which immovable property is transferred be liable to be stamped as a Conveyance?
 
 
Yes, After the amendment of article 25 of the Bombay Stamp Act, the definition of conveyance has been widened, in view of the amendment decree or final order of the court by which immovable property is transferred is liable to be stamped as a Conveyance.
 
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Are orders made by the High Court under Section 384 of the Companies Act, 1956 in respect of amalgamation of companies be liable for payment of stamp duty as on a Conveyance?
 
 
Yes, after the Amendment made in 1993, the preview of Article 25D has been widened so as to bring orders made by the High Court under Section 384 of the Companies Act 1956, in respect of amalgamation of companies. Therefore stamp duty as on a Conveyance will have to be paid on such orders.
 
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What are the important judgements which refer to determination of market value?
 
 

Some of the judgements which can be of assistance in determining the market value are: 1) Reghubans Narain v/s Government of U.P. (AIR 1967 SC 465) which arises out of land Acquisition Act where the Supremen Court has held that market value on the basis of which consideration is payable under Section 23 of the Act means, the price that a willing purchaser would pay to the willing seller for a property having due regard to its existing advantage and its potential possibilities laid out in its most advantageous manner excluding any advantageous due to the carrying out of the scheme for the purpose for which the property is compulsorily acquired.

 
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What are the consequences of under valuation of document?
 
 
It must be noted that if the collector has reason to believe that the instrument does not mention the true market value and such instrument has already been presented for registration, he can take a step for recovery of the duties by coercive measures only after giving reasonably opportunity to the opposite party of been heard. If the collector determines that the proper stamp duty has not been paid penalties can be levied on such instruments. The penalty can be levied at 2% per month for the period of default, till the time the proper stamp duty has not been paid as stated in this section the instruments are liable to be impounded.
 
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In a welfare society what should be the approach of a common man or an assessee while paying the Stamp Duty?
 
 
No doubt, it is the duty of the common man and assessee to pay the taxes to the Government when they are just and reasonable. However, even the Supreme Court of India has stated that it is the duty of the assessee to pay the taxes to the state. At the same time, it should be remembered that when it is beyond the capacity of common man to pay the taxes he cannot be forced to do so. It will be worthwhile to remember that the House of Lords have stated that if there be a means of evading stamp duty. So much the better for those who can make it. It is no fraud upon the crown. It is a thing which they are perfectly entitled to do.
 
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A flat has been purchased for Rupees Eighty lakhs after filing Form No. 37-I. Can the stamp authorities contend that the market value of the said property is Rupees Eighty Five Lakhs?
 
 

Stamp Duty has to be paid on the market value of the property. This led to instances whereby flats purchased after obtaining the N.O.C. from the Income Tax Authorities (which has the power to acquire the property if their has been under valuation in excess of the prescribed limit i.e. Rs. Ten Lakhs earlier and now Rs. Seventy Five Lakhs) were not accepted as the market value of the property by the Stamp Authorities. This had continued for more than seven years. Many Professionals, Associations, (including the Federation of Association of Accommodation Industry), Newspapers related to accommodation (i.e. Accommodation Times), had protested against the same. Doubts as to market value had been raised in flats purchased in public auction. Since the introduction of the Bombay Stamp (Determination of True Market Value of Property) Rules 1995 whenever a certificate about market value of a particular property is issued by a Appropriate Aurhority under provisions of the Income Tax Act, or if a property is sold or alloted by Government or Semi-Government body or Government Undertaking or local authority on the basis of predetermined price, then value stated in such certificate issued by an appropriate authority or determined by the bodies referred to above, shall be the true market value of the subject matter (property). Now irrespective of the year of purchase in view of the above rules the authorities are duty bound to accept the value reflected in the Agreement if the premises are purchased after obtaining the Certificate of the Appropriate Authority (Income Tax).

 
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