Stamp Duty — Gift deed — Market value not relevant : Stamp Act, 1899.

The instrument in question was a deed of gift dated 11 -2-2009 executed by one Ramesh Chand Lohia in favour of his grandson in respect of a property of Rs.61 lakh in value, as disclosed in the gift deed. However, on the objection of Sub-Registrar its value was enhanced to Rs.61 lakh for the purposes of stamp duty and on the said value stamp duty of Rs.4,27,100 was duly paid.

The matter was referred u/s.33/47-A of the (Indian) Stamp Act, 1899 for determination of the market value and the deficiency in payment of stamp duty was determined.

The said order was challenged and upheld in ap-peal. The important aspect involved in the petition was whether the authorities under the Act are competent u/s.47-A of the Act to determine the market value of the property referred to in the gift deed in question for the purposes of levy of stamp duty.

The Court observed that a gift deed is chargeable to stamp duty under Article 33 of Schedule 1-B of the Act. It provides that a gift is chargeable to stamp duty as a conveyance provided under Article 23 Clause (a) for a consideration equal to the value of the property.

In the said Article words used are ‘value of the property’ as distinguished from the ‘market value’, meaning thereby that for the purposes of determining stamp duty on a gift deed, market value is not required to be mentioned/determined. The disclosure of the value of the property in the gift is sufficient for the purposes of payment of stamp duty.

Thus, there is a clear departure in the language used in Article 33 of the Schedule 1-B of the Act and section 47-A of the Act. Section 47-A of the Act uses the expression in ‘market value’, whereas for levying stamp duty on a gift deed Article 33 of Schedule 1-B of the Act uses the expression ‘value of the property’.

The Legislature in its wisdom has differently used the words ‘value of the property’ and ‘market value’ in the Act. It is not without purpose. ‘Market value’ refers to the value of the property prevailing in the market on which the prospective purchaser is ready and willing to purchase and seller is ready and willing to sell the property in the ordinary course of business. Therefore, market value is a bilateral transaction depended upon the will of two persons. On the other hand, ‘value’ simply connotes the estimated monetary worth of the property in the eyes of the seller and is in the nature of a unilateral act.

Therefore, the market value is not at all relevant for levying stamp duty on a gift deed and the provisions of section 47-A of the Act does not come into play which necessitate determination of market value.