Official guidance, Tamil Nadu land law
Lease deed stamp duty revision for Document No. P.18/2020
The Registration Department's Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No.33968/P1/2020 on 16 July 2024 concerning the stamp duty classification of a lease deed between M/s. A.C.K. Educational Trust and M/s. Fixit Private Limited. The authority set aside the Joint 1 Sub Registrar, Chennai Central order dated 3 November 2020, classified the deed under Article 35(a) of the Indian Stamp Act, 1899, and upheld the revision petition.
What the proceeding decides
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No.33968/P1/2020 on 16 July 2024 under section 56(1) of the Indian Stamp Act, 1899. The proceeding concerns Document No. P.18/2020, later registered as Document No. 969/2020 at the Joint 1 Sub Registrar Office, Chennai Central.
The authority set aside the Joint 1 Sub Registrar's order dated 3 November 2020. The lease deed was held classifiable under Article 35(a), rather than Article 35(b), of the Indian Stamp Act, 1899.
Lease and parties
Document No. P.18/2020 is a lease deed executed on 18 June 2020 with:
- M/s. A.C.K. Educational Trust as lessor.
- M/s. Fixit Private Limited as lessee.
- An 18 year term from 1 October 2018 to 30 September 2036.
- Monthly rent of Rs.15,000 from 1 October 2018 to 30 September 2027.
- Monthly rent of Rs.25,000 from 1 October 2027 to 30 September 2036.
- Lease consideration stated as Rs.43,42,000.
- Stamp duty of Rs.43,420 borne by the deed.
Why additional stamp duty was imposed
The Joint 1 Sub Registrar treated the 2020 deed as extending an earlier registered lease dated 10 November 1995. The lease period was therefore calculated as 41 years, from 10 November 1995 to 2036.
Based on that calculation, the deed was classified under Article 35(b). Deficit stamp duty of Rs.1,62,980 and a penalty of Rs.520 were determined. M/s. Fixit Private Limited paid those amounts, after which the pending document was registered as Document No. 969/2020 and returned.
Reasons for allowing the revision
The Chief Controlling Revenue Authority concluded that the earlier nine year registered lease and the period left uncovered before the new lease could not be added to the current deed's lease period. The proceeding also referred to an earlier decision in which a left out period between two leases was not treated as part of the current lease deed.
The authority stated that an unwritten lease of immovable property, other than for agricultural or manufacturing purposes, is treated as a month-to-month lease under the cited provisions. On that basis, the 2020 deed was classified under Article 35(a), the earlier determination was set aside, and the revision petition was upheld.
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Common questions
Can a gap between an expired lease and a new lease be added to the new lease period for stamp duty?
The Chief Controlling Revenue Authority held that the left out period could not be treated as part of the current lease deed. The earlier registered lease period also could not be added to the current deed.
What happened to the deficit stamp duty and penalty imposed on M/s. Fixit Private Limited?
M/s. Fixit Private Limited had paid deficit stamp duty of Rs.1,62,980 and a penalty of Rs.520 before registration. The proceeding set aside the order that determined those amounts, but the source does not state whether a refund was directed.
What stamp duty classification was finally applied to the lease deed?
The Chief Controlling Revenue Authority classified Document No. P.18/2020 under Article 35(a) of the Indian Stamp Act, 1899. The earlier Article 35(b) classification was set aside.
Does this proceeding decide the stamp duty treatment of every lease deed?
No. It decides the revision petition concerning the specific lease between M/s. A.C.K. Educational Trust and M/s. Fixit Private Limited, registered as Document No. 969/2020.
