ENSCO MARITIME LTD. vs. COMMISSIONER OF INCOME TAX DEHRADUN

ITA/169/2004HC UttarakhandUKHC01004935200416 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA3 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition fails and is dismissed. The Court observed that the vendor's income tax Form 34-A indicated the building consisted of three bedrooms and one shop. Since the sale deed did not disclose the existence of this shop, which is a commercial portion, and stamp duty was paid as if the entire building was residential, the authorities below were justified in demanding deficit stamp duty and penalty. The reasoning is that stamp duty is levied based on the nature and value of the property conveyed, and any undisclosed commercial use would attract higher duty. The Court did not expressly leave any issue undecided. The operative direction was the dismissal of the writ petition, with a subsequent grant of eight weeks for the petitioner to deposit the demanded amount.

What were the facts?

The petitioner, B.K. Pahwa, filed a writ petition challenging orders dated 11.09.2002 by the Additional Collector (Finance), Haridwar, and 22.12.2003 by the Commissioner, Garhwal Region, Dehradun. These orders directed the petitioner to pay deficit stamp duty of Rs. 18,700/- and a penalty of Rs. 7,854/-. The dispute arose from a sale deed dated 9th January, 2001, where the petitioner purchased a building. The sale deed described the property as residential, including three bedrooms, a store, latrine, bathroom, and kitchen. However, an income tax Form 34-A obtained by the vendor indicated the building comprised three bedrooms and one shop, in addition to other constructions mentioned in the sale deed. The authorities below observed that since the commercial portion (shop) was not declared in the sale deed and stamp duty was paid as for a residential building, additional duty was payable on the commercial part.

What were the issues?

1. Whether the stamp duty and penalty imposed by the Additional Collector and Commissioner were justified, considering the discrepancy between the description in the sale deed and the vendor's income tax record regarding the property's nature (residential vs. commercial). The assessee (petitioner) argued that no spot inspection was conducted in their presence and that they are not concerned with what the vendor declared in her income tax records. The revenue contended that the vendor's income tax Form 34-A clearly showed the existence of a shop, which is a commercial portion. Since the sale deed did not reflect this commercial aspect and stamp duty was paid for a residential building, the additional stamp duty and penalty were rightly imposed.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 169 of 2004 (M/S)

B.K. Pahwa

…..Petitioner Versus Court of Commissioners and others ….Respondents

Mr. Pankaj Miglani, Advocate for the petitioner. Mr. A.K. Joshi, Addl. C.S.C. for the State.

Hon’ble Alok Singh, J. (Oral)

Present petition is preferred assailing the judgment and order dated 11.09.2002, passed by Additional Collector (Finance), Haridwar as well as order dated 22.12.2003, passed by Commissioner, Garhwal Region, Dehradun whereby petitioner was asked to pay deficit stamp duty of Rs. 18,700/- and penalty of Rs. 7,854/-. Petitioner has purchased one building, vide sale deed dated 9th January, 2001 from Smt. Uma Rani. In the detail of the property as mentioned in the sale deed, building is shown consisting of three bed rooms, store, latrine, bathroom and kitchen, however, as per the income tax Form 34-A obtained by the Vendor, building was consisting of three bed rooms and one shop besides other construction shown in the sale deed. It is observed by both the Courts below that since commercial portion (shop) has not been shown in the sale deed and stamp duty was paid showing the sold building as residential building, therefore, stamp duty as payable on commercial portion ought to have been paid. Mr. Pankaj Miglani, learned counsel for the petitioner submits that no spot inspection was made in the presence of the petitioner. Petitioner has no concern

2 what is mentioned by the Vendor in her income tax record. While submitting details for assessment, vendor has shown that she has constructed three rooms and one shop in the building, therefore, income tax Department has rightly issued Form 34-A showing building consisting of three bed room and one shop. Since building is consisting of one shop, i.e. one commercial portion, therefore, no interference is called for. Writ petition fails and is hereby dismissed. At this stage, Mr. Pankaj Miglani, learned counsel for the petitioner seeks and is granted eight weeks time to deposit stamp duty and penalty as imposed by the Courts below. (Alok Singh, J.) Dated 17th August, 2015

Shiv

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