Applicability of Stamp Duty
Raj Kumar Makkad
(Querist) 03 March 2010
This query is : Resolved
Dear Experts!
My client was successful bidder of a closed mill under liquidation and liquidator was a High Court. Auction was confirmed by High Court. The auction/bidding value included Rs. 5 crore as of land and building and 10 crore as plant and building. As per direction of Liquidator, my client got executed sale-deed/sale-certificate by affixing stamp duty only against the value of land but the sale-deed was impounded by the concerned revenue officer and show cause notice was issued to my cleint stating therein that under section 47-A of Stamp Act my cleint is required to affix the stamp on entire amount of Rs. 15 Crore.
Now my quarry is:
1. Whether the stamp duty is liable to be charged only against immovable property?
2. If yes then machinery and plant installed in the mill shall come under the definition of immovable category or not? If not the reasons thereof
Any other suggestion is also welcome.
Parveen Kr. Aggarwal
(Expert) 03 March 2010
The plant and machinery being embedded in the earth for permanent beneficial enjoyment will certainly be considered as immovable property as part of land and building and as such, requires compulsorily registered instrument for its transfer.
However, you may contest the claim of the Revenue Officer on the ground that the sale deed was only with respect to the land and building and stamp duty is chargeable only on what has been conveyed through the sale deed and on nothing else, provided the sale deed is only with regard to the land and building.
A V Vishal
(Expert) 04 March 2010
As per Indian Stamp Act, 1899, conveyance includes conveyance on sale and every instrument by which property, whether movable or immovable, is transferred. Further, the Indian Registration Act, 1908 provides that immovable property includes land, building and things attached to the earth. Government clarified (July 1994) that plant and machinery installed in the factory for permanent use when sold alongwith the factory land and building would constitute a part of immovable property.
In view of the above explanation Stamp duty is chargeable to Plant & Machinery also.
