CHAPTER VI

STAMP DUTY AND REGISTRATION FEE

6.1 Tax Administration

Receipts from stamp duty (SD) and registration fee (RF) are regulated under
the Indian Stamp Act 1899 (IS Act), Indian Registration Act, 1908 (IR Act)
and the rules framed there-under as applicable in Maharashtra and are
administered at the Government level by the Additional Chief Secretary,
Revenue Department. The Inspector General of Registration (IGR), Pune is
the head of the Stamp duty & Registration Department who is empowered
with the task of superintendence and administration of registration work. The
organization setup of the department is detailed in Appendix-6.1.
6.2 Internal Audit
The details of audit conducted by the internal audit wings of IGR are as
detailed in Table 6.2.
Table 6.2
Year No. of units Audit observations
Planned Audited Unaudited Raised Settled up Pending
to as on
31/03/2019 31/03/2019
2014-15 72 14 58 55 12 43
2015-16 72 11 61 115 15 100
2016-17 72 57 15 415 30 385
2017-18 72 209 0 1,296 94 1,202
2018-19 72 182 0 1,427 102 1,325
Total 360 473 134 3,308 253 3,055
Source: Information furnished by the department
Thus, the facts indicate that:
 Only 7.65 per cent of the audit observations raised by the internal audit
were settled.
6.3 Results of Audit
There are 556 auditable units in the Registration and Stamps Department, out
of these, Audit selected 141 units for test check wherein 13,61,943
instruments were registered during 2018-19. Out of these, Audit selected
79,862 instruments (approx. 5.86 per cent) for test check. During scrutiny,
Audit noticed short/non-realization of SD and RF of ` 113.04 crore in 429
instruments (approx. 0.54 per cent of sampled cases). These cases are
illustrative only as these are based on test check of records. Audit has pointed
out similar omissions in earlier years. Not only do these irregularities persist
but have also remain undetected till next audit is conducted. There is a need
for the Government to improve the internal control system including
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

strengthening of internal audit so that recurrence of such cases can be avoided.

Irregularities noticed are broadly falling under the following categories.
Table 6.3
(` in lakh)
Sl. Category Number of Amount
No. observations
1 Non/short levy of SD and RF 08 172.11
2 Incorrect exemption of SD and RF 27 6,717.93
3 Misclassification of documents 13 46.47
4 Undervaluation of property 238 1,194.47
5 Other irregularities 143 3,173.33
Total 429 11,304.31
During the year 2018-19, the department accepted underassessment and other
deficiencies of ` 21.16 crore pertaining to 332 cases, of which 49 cases
involving ` 39.14 lakh were pointed out during the year 2018-19 and the rest
in the earlier years. The department recovered ` 21.16 crore in 340 cases
during the 2018-19, of which 49 cases involving ` 39.14 lakh relate to the year
2018-19 and the rest to earlier years.
In eight1 cases entire amount of ` 2.61 crore2 on account of SD and RF was
recovered after being pointed out to the Government between May 2019 and
July 2019.

1
Offices of the Sub Registrar, Aurangabad (Document No. 6991/2016); Joint Sub
Registrar, Haveli-III, Pune (Document No. 5057/2015); Joint Sub Registrar, Haveli-VI,
Pune (Document No. 841/2013); Joint Sub Registrar, Haveli-VI, Pune (Document No.
9809/2014); Joint Sub Registrar, Haveli-VI, Pune (Document No. 5500/2015); Joint Sub
Registrar, Haveli-VIII, Pune (Document No. 7668/2016); Joint Sub Registrar, Haveli-
VIII, Pune (Document No. 11000/2014) and Joint Sub Registrar-I, Khed, Pune
(Document No. 5933/2015)
2
` 98.85 lakh + ` 32.83 lakh + ` 12.45 lakh + ` 26.34 lakh + ` 26.57 lakh + ` 37.69 lakh +
` 14.79 lakh + ` 11.65 lakh

84
 Chapter VI - Stamp Duty and Registration Fee

PERFORMANCE AUDIT
REVENUE DEPARTMENT
6.4 Preparation of Annual Statement of Rates for determination of
market value for levy of Stamp Duty and Registration Fee
Executive Summary
Stamp duty and registration fee is leviable on the market value of the
property. The market values of properties are determined by the
Government in accordance with the rules framed under the
Maharashtra Stamp (Determination of True Market Value of Property)
Rules, 1995.
The Inspector General of Registration and Controller of Stamps, Pune is
the Chief Controlling Revenue Authority who issues an Annual
Statement of Rates (ASR) showing rates of land and buildings.
A performance audit conducted on preparation of Annual statement of
Rates for Determination of Market Value for levy of Stamp Duty and
Registration Fees in Maharashtra for the period 2014-15 to 2018-19
revealed that incorrect and incomplete data was being considered for
preparation of ASR. Change in status of land like conversion to non-
agricultural land were not ascertained from the revenue authorities and
updated. The change in survey number due to fragmentation/
amalgamation of areas was not updated. Value zone maps were not
updated as per development plan and also separate value zones for high
value transactions were not formed. ASR rates were increased despite
decrease in average sales consideration. Valuation guidelines (VG) for
determination of depreciation of building, impact of FSI/TDR, buildable
reservation in valuation of land were not uniform throughout the State.
The VG for increase in valuation of properties located in large housing
projects situated in municipal corporation/ council limits was not
applicable to properties having similar potential situated in influence
zone. Guidelines were not framed for valuation of parking spaces
allotted free of cost to owners.
There is no mechanism of internal audit to draw assurance on the
quality of work being done for proper preparation of ASR. Periodical
returns to monitor stages of preparation of ASR were not prescribed.
6.4.1 Introduction
Levy and collection of Stamp Duty (SD) is governed by the Maharashtra
Stamp Act, 1958 (MS Act) and Registration Fees (RF) by the Indian
Registration Act, 1908 as amended from time to time. The SD and RF is
leviable on the market value of the property. Market value means the price
which such property would have fetched if sold in open market on the date of
execution of such instrument or the consideration stated in the instrument
whichever is higher. The market values of the properties are determined by
the Government in accordance with the rules framed under the Maharashtra
Stamp (Determination of True Market Value of Property) Rules, 1995 (herein
after called ‘Valuation Rules’).

85
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

As per Valuation Rules3, the Inspector General of Registration and Controller

of Stamps, Pune (IGR) who is the Chief Controlling Revenue Authority
(CCRA) shall by an order issue Annual Statement of Rates (ASR) on the first
day of April every year4 showing average rates of land and buildings situated
in every tahsil, Municipal Corporation and local body area taking into account
the average rates of lands and buildings prepared and submitted to him by the
Joint Director of Town Planning and Valuation (JDTP). The rates of
properties are arranged in the ASR, ward wise/zone wise for urban properties
and tahsil wise, village wise for rural properties.
6.4.2 Organisational Set-up
Revenue Department at Mantralaya headed by the Additional Chief Secretary
and responsible for overall administration of registration and stamp duty in the
state. The responsibility for levy and collection of SD and RF in the state is
entrusted to the office of the IGR. The office of the IGR is assisted by the
office of the Additional Controller of Stamps, Mumbai, ten5 offices of the
Deputy Inspectors General of Registration (DIGs), nine offices of the
Assistant IGRs, 406 offices of the Joint District Registrars (JDRs) and
Collector of Stamps (COS) and 507 Sub-Registrars (SRs) at district and tahsil
levels. The organization setup of the department is detailed in Appendix-6.1.
6.4.3 Audit Objectives
The Performance Audit (PA) was conducted with a view to ascertain whether
 input/data collected from various departments was complete and
properly compiled, analysed and validated in the preparation of ASR;
 the rates and instructions in ASR were properly determined for
computation of market value of properties by taking into account the
established principles of valuation in every part of the State; and
 effective internal control mechanism existed in the Department for
ensuring proper preparation of ASR.
6.4.4 Audit Criteria
The audit criteria were taken for the PA from the following sources:
 The Indian Registration Act, 1908;
 The Maharashtra Stamp Act, 1958;
 The Maharashtra Stamp (Determination of True Market Value of
Property) Rules, 1995;
 Annual Statement of Rates of the selected districts for the period
January 2014 to March 2019 along with Valuation Guidelines; and

3
Section 3 of the Valuation Rules
4
w.e.f. 31.12.2015 and prior to 2015 “every year on 01 January’’
5
two at IGR Office and one in each of the eight regional Offices
6
three offices of the Collector of Stamps at Mumbai and three at Mumbai Suburban
District, 34 offices of the Joint District Registrars and Collector of Stamps for rest of the
State

86
 Chapter VI - Stamp Duty and Registration Fee

 Development Control Regulation (DCR) of municipal

corporations/councils of selected districts; and notification/ resolutions/
circulars issued by the concerned department/ Government.
6.4.5 Scope and methodology of Audit
The performance audit was conducted for the period from January 2014 to
March 2019. The scrutiny of records was conducted at Mantralaya and at the
offices of the IGR, JDTP, Deputy Director of Town Planning (DDTP) and
selected two7 Assistant Directors of Town Planning (ADTP), four8 COS, four9
JDRs and 2010 SRs during May 2019 to November 2019. Apart from above,
the offices of the Dy. Director of Land Records, District Collectors and
Municipal Commissioners of selected districts were also visited for collection
of related information.
Entry conference with the department was held on 02 May 2019. Audit
findings were communicated to Government in March 2020 for their
comments, however, response thereto was awaited (June 2020).
Sampling: The method of judgmental sampling was adopted based on
maximum average annual revenue collection for selection of samples for
detailed scrutiny. There are eight11 regions in the state. Of which, three regions
viz. Mumbai, Konkan and Pune were selected. For district level selection, both
the districts in Mumbai region (Mumbai and Mumbai Sub-urban) and one
district from each of the remaining two selected regions i.e. Thane district
(Konkan region) and Pune district (Pune region) were selected. In selected
district, 25 per cent of the SRs having maximum average annual revenue
collection under Article 5 of MS Act were selected. In selected SRs,
instruments under Article 5 (development agreement), Article 25 (agreement
to sale and conveyance of movable/immovable properties), Article 36 (lease
deed) and Article 60 (Deed of assignment of lease) were examined.
6.4.6 Financial position
The details of revenue receipt on account of SD and RF for the period 2014-15
to 2018-19 are shown in Table 6.4.6:
Table 6.4.6 : Revenue Receipt on account of Stamp Duty and Registration Fee
(` in crore)
Year Stamp Duty Registration Fees
2014-15 18,283.74 1,675.55
2015-16 19,962.98 1,804.01
2016-17 19,405.41 1,606.42
2017-18 24,498.84 1,942.98
2018-19 26,597.26 1,947.79
Total 1,08,748.23 8,976.75
Source: Finance Accounts

7
Pune and Thane
8
Andheri, Boriwali, Kurla and Mumbai City
9
Pune (City), Pune (Rural), Thane (City) and Thane (Rural)
10
Andheri No.I,II,IV,VI; Bhiwandi No.I; Haveli No.I,III,XI,XVII,XVIII, XX,XXII,XXVI;
Kalyan No.II,IV,V; Kurla No.I; Mulshi, No.II; Mumbai No-II and Thane No.V
11
Amravati, Aurangabad, Konkan, Latur, Mumbai, Nagpur, Nashik and Pune

87
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

The receipts on account of SD and RF are accounted for under MH-0030–

‘Stamps and Registration Fees’ in consolidated fund of the state.
Audit Findings

6.4.7 Audit Findings on preparation of ASR

6.4.7.1 Consideration of incomplete data for preparation of ASR
As per Valuation Rule 4 (1), the office of the JDTP shall prepare ASR
showing average rates of land and building situated in every tahsil, municipal
corporation and local body area with the help of regional heads i.e.
ADTP/DDTP and submit the same for approval to the CCRA.
Rule 4 (2) ibid envisages that the data in respect of average rates of land and
building in every tahsil, municipal corporation and local body area shall be
arranged in the ASR as far as possible in ward-wise/zone-wise manner in
respect of urban properties and tahsil-wise, village-wise as the case may be in
respect of rural properties. For the purpose of average annual rates, properties
may be divided in groups, sub-groups or classes after taking into account the
type of the land, type of construction, location and situational advantages or
disadvantages of property. While working out the average rates of land and
buildings, the officers concerned shall take into account the established
principles of valuation, valuation guidelines, if any, and any other details that
they may deem necessary.
The office of the ADTP, Pune furnished (December 2019) following details of
data pertaining to the years 2017 and 2018 which were used for computation
of average rates for the preparation of ASR of Pune district for the years
2018-19 and 2019-20 respectively.
Table 6.4.7.1: Details of data (instruments under Article 25) available at the office of
ADTP, Pune
Year Total Total Total Total number Total number Number of
number of number of number of of instruments of instruments
instruments instruments instruments having instruments considered
under discarded having consideration having for
Article 25 due to consideration more than consideration computation
incorrect less or equal ASR by one to more than of average
data to ASR one hundred ASR by 100 rate
per cent and above
per cent
2017 1,44,747 13,401 51,316 73,785 6,245 1,25,101
2018 2,10,516 8,022 72,392 1,20,913 9,189 1,93,305
Source: Data furnished by office of the ADTP, Pune from iSARITA

However, the data obtained through iSARITA in the office of the IGR
revealed that there were 1,84,079 and 2,06,387 instruments registered under
Article 25 of the MS Act during 2017 and 2018 respectively in Pune district.
This shows that there was difference of 39,332 and 4,129 instruments
pertaining to the years 2017 and 2018 respectively in IGR office when
compared with the data submitted by the office of the ADTP. Further, the
instruments having consideration more than 100 per cent of ASR were not
considered by the ADTP office for preparation of ASR. Audit requisitioned

88
 Chapter VI - Stamp Duty and Registration Fee

similar information from remaining selected DDTP/ ADTP offices12, but the
same were not furnished.
The office of the ADTP, Pune did not furnish any reason for the use of
incomplete data for calculating average rate.
This shows the consideration of incomplete inputs for preparation of ASR due
to absence of system of cross verification of input data.
Audit further observed that every ATDP office is provided with iSARITA
terminal for downloading data to arrive at average rate of properties for the
preparation of ASR. However, option to generate report showing SR office
wise summary of instruments registered for a particular period was not
available at ADTP office level. Similarly, important fields such as type of
property (land /flat/ office /shop/ industrial) were not available in iSARITA at
ADTP office level.
The office of the ADTP, Pune confirmed (December 2019) that data generated
from iSARITA contains month of registration only. Other required details
such as type of property were not available in data generated from iSARITA.
Hence, such data was being sorted out manually.
The matter was pointed out (March 2020) to the office of the IGR; reply was
awaited.
Recommendation: A system to assess completeness and correctness of input
data intended to be used for preparation of ASR may be put in place.
6.4.7.2 Non-submission of monthly data of instruments to ADTP by SRs
for computing average increase in ASR
As per Valuation Rule 4(7), “all the Registering Officers shall send to the
Town Planning and Valuation Officers appointed to assist the offices of Joint
Directors of Town Planning and Valuation for preparation of annual statement
of rates, the extract of the register in respect of the instruments presented for
registration in which consideration for the subject property is stated to be more
than the annual statement of rates by 30th day of the following month.”
Audit observed (June to November 2019) that none of the test checked SR
offices were sending nor the offices of the DDTP/ADTP were insisting for
submission of the said data and further submitted (June to November 2019)
that the required data was available in iSARITA at DDTP/ATDP office level.
The office of the IGR stated (June 2019) that the system of collection of sales
transaction data from SRs had been dispensed with.
The reply is not acceptable, as Audit did not find issue of any such instruction
by IGR office. Further, neither there exist a system of submitting required
data manually nor complete information was available in iSARITA. Thus, the
completeness and validation of data used for preparation of ASR could not be
ensured.
Recommendation: Department may ensure reliable system for making
available complete data at ADTP level which is required for preparation of

12
ADTP, Konkan and DDTP, Mumbai

89
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

ASR and also evolve adequate mechanism of cross verification for validation
of data.
6.4.7.3 Non–updation status of land in ASR
As per ordinance (January 2017) issued by the Revenue & Forest Department,
if the final development plan of any area has been published and the non-
agriculture (NA) assessment, conversion tax, nazarana or premium and other
Government dues thereon have been paid, then the use of the said land would
be deemed to be converted for the use as shown in the final development plan
and there would be no need for a separate permission for converting to NA
use.
The office of the JDTP is issuing instructions to ADTP offices every year for
updating the status of NA land while preparing the ASR by obtaining details
of NA permissions issued by the Revenue department i.e. Tahsil/ Collector
offices.
During scrutiny (September 2019) audit observed that office of the ADTP,
Konkan did not receive any details of NA permissions issued by the
Collectorate, Thane in spite of specific requisition every year. The office of
the ADTP, Pune neither asked for the required information nor the Collector
office Pune submitted such information during 2014-15 to 2018-19.
In spite of audit requisition (July 2019 and October 2019), the offices of the
District Collectors, Pune and Thane did not submit any information of NA
permissions to Audit.
Audit scrutiny of following test checked cases revealed that (July and
November 2019) in the offices of the Jt.SR Haveli – XI Pune and JDR Pune
(Rural), the Collectorate, Pune changed the use of land by issue of NA
permissions (September 2014 and March 2017), but the related updation was
not considered in subsequent ASRs prepared by ADTP office, Pune as
illustrated below:
Case study – I:
The Collectorate, Pune issued (September 2014) NA permission for
conversion of agriculture land to non-agriculture purpose admeasuring 1.8 ha
situated in survey No.220 (part) under village Fursungi, tahsil Haveli, district
Pune.
However, in ASR for the year 2017-18, said survey was classified as land
having probable NA potential instead of correct classification under NA Zone.
In reply, the office of the ADTP, Pune stated (July 2019) that even if the
survey number having NA permission was not included in the NA zone then
as per VG 23, the rates of NA zone could be applied.
The reply is not acceptable, as the said land was situated outside the gaothan
of village Fursungi, it was required to be classified under value zone No. 9.4
under heading ‘remaining NA land outside gaothan area’ having rate of
` 8,850 per sqm in ASR. However, the same was classified under value zone
No. 11.4 under heading ‘remaining probable NA land outside gaothan area’
having rate of ` 7,780 per sqm. Thus, failure of ADTP office resulted in non-
updation of ASR due to non-consideration of important input.

90
 Chapter VI - Stamp Duty and Registration Fee

Case study – II:

The Collectorate, Pune issued (March 2017) NAA orders for conversion of
agriculture land to non-agriculture purpose admeasuring 13.35 ha situated in
survey Nos. 98/1, 98/2, 99/1, 99/2, 99/3, 99/4, 101/2 and 101/3 under village
Mann, (influence zone) tahsil Mulshi, district Pune. This fact was mentioned
in a conveyance deed adjudicated by the JDR, Pune (Rural) in
December 2017.
However, the said survey numbers were not intimated by the office of the
JDR, Pune (Rural) to ADTP office, Pune for updation in subsequent ASR. As
a result, audit observed (November 2019) that in ASR for the year 2018-19,
the said survey numbers were still classified as agriculture land under value
zone No. 6/0 (at the rate of ` 2.87 crore per ha i.e. ` 2,873 per sqm) instead of
proper classification under value zone No. 9.4 (at the rate of ` 9,750 per sqm).
On being pointed out (November 2019), the office of the JDR, Pune (Rural)
did not submit any specific reply.
This shows absence of system of exchange of information of NA permission
issued by Revenue department resulting in non-updation of ASR.
Recommendation : System for exchange of information related to changes in
status of land permitted by the revenue authorities and its updation in ASR
may be formulated.
6.4.7.4 Non-updating changes in survey number in ASR
The change in survey number is a continuous process mostly due to sub-
division, fragmentation of large area and amalgamation of small areas. In
order to ensure incorporation of all changes in survey numbers, it is necessary
to obtain up to date information from offices of the Dy. Director of Land
Records (DDLR)/ City Survey Officers (CSO) concerned. The JDTP office is
issuing instructions to DDTP/ADTP offices every year for updating the status
of city survey numbers.
Audit observed (July to December 2019) that the required information of
changes made by the offices of the DDLR/CSO needed for updation of ASR
was not available with any of the test checked DDTP/ADTP offices.
On being pointed out, office of the DDTP, Mumbai replied (August 2019) that
in spite of requisition with land records offices, the required information was
not received. The office of the ADTP, Pune stated (December 2019) that land
records offices had intimated (December 2019) to deposit requisite fee for
required information. However, no further action by the office of the ADTP,
Pune was found on records. The office of the ATDP, Konkan stated
(September 2019) that required information was not received.
In eight test checked cases (July 2019) of offices of the DDTP, Mumbai, it
was observed in ASR for the Mumbai and MSD that sub-divisions of one city
survey number was not separately identified by giving part number such as
‘part-1, part-2, etc’ but mentioned as ‘city survey number (part)’ and was
appearing in two value zones having different rates for valuation. This may
result in short valuation of a piece of land or vice–versa.

91
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

Recommendations: The Department may consider developping a mechnism

in coordination with DDLR/CSO offices so that required information is
received in a timely manner for preparing and updating of ASR.
6.4.7.5 Non-framing of separate value zones due to non-analysis of sales
data
As per directions given by JDTP Office in the Annual Work Plan13, survey
numbers under a value zone, where consideration was substantially more than
market value or where a substantially large number of transactions take place,
should be provided with an independent value zone.
Audit scrutiny (July to September 2019) of average sales data prepared for
ASR of the years 2014 to 2018-19 by selected DDTP/ADTP offices revealed
that though the consideration was substantially more than market value in
sizeable number of transactions, separate value zones were not created as
illustrated in Table 6.4.7.5:
Table 6.4.7.5: Statement showing range in which consideration was more than market
value
Sl. Name of Office Name of Number Range of Range by which Appendix
No. division/office of frequency of consideration is
of JDTP affected transactions more than
value market value
zones (in per cent)
1 DDTP, DDTP, Mumbai 2 180-495 50-134 6.2(A)
Mumbai
2 ADTP, ADTP,Konkan 3 41-226 51-221 6.2(B)
Konkan
3 ADTP, Pune ADTP, Pune 7 25-48 30-126 6.2(C)
4 Jt.SR Kalyan- ADTP, Konkan 1 595-2749 102-239 6.3
V
Source: Information furnished by the offices of the DDTP, Mumbai; ADTP, Konkan; ADTP, Pune
and Jt. SR, Kalyan-V

Case study –I :
Urban Development Department (UDD), Government of Maharashtra
approved (March 2014) special township in the village Khoni and Antarli of
tahsil Kalyan, district Thane to be developed by a developer. The project has
a total area of 111.47 ha. In ASR, the land was classified in rural area
Division No. 7 of Kalyan tahsil.
Audit observed (September 2019) that in all instruments executed in the office
of the Joint SR, Kalyan-V, district Thane during last three years, the
consideration value was more than 100 per cent of ASR value consistently
(Sl. No. 4 of Table 6.4.7.5). However, separate value zone for this property
was not created in the ASR. As a result, the ASR was not giving true market
value of the land.
On being pointed out (July to September 2019), the offices of the DDTP
Mumbai and ADTP Konkan stated that separate value zones were not created

13
It is a yearly plan containing scheduled due dates of various stages of work such as
collection, consolidation and analysis of inputs, preparation and submission of draft ASR,
etc.

92
 Chapter VI - Stamp Duty and Registration Fee

due to shortage of staff but agreed to create the same in ASR for the year
2020-21. However, the office of the ADTP, Pune stated that no such
instructions were issued by the office of the JDTP, Pune.
Reply was not tenable as aforesaid instructions were contained in the Annual
work plan issued by JDTP.
Recommendation : Periodic analysis of sales data as prescribed by the office
of the JDTP in the Annual Work Plan may be ensured for creation of separate
value zones in ASR.
6.4.7.6 Non-updating value zone maps as per development plan
The office of the JDTP has been issuing instructions to DDTP/ADTP offices
ever year for updating value zone maps. In order to determine correct market
value of properties located in a value zone, it was necessary that the value
zone maps were prepared based on the updated maps of City Survey
Office/Development Plan/ Regional Plan so that changes in the residential
zone, road zone could be incorporated in the ASR.
Audit scrutiny (July-December 2019) revealed that offices of the DDTP,
Mumbai and ADTP, Konkan prepared up-to-date value zone maps but the
office of the ADTP, Pune updated the value zone maps partially. Value zone
maps of zone Nos.1-13, 36-38, 40-41, 45, 48, 52, 56-57, 59-60, 62-63 of Pune
Municipal Corporation (PMC) were not updated in the ASR. Further, a test
check of updated records revealed that in many value zones, CTS numbers
were mentioned in the ASR but in corresponding value zone maps, only
survey numbers were given. Due to this inconsistency, identification of
property in ASR as per value zone map was not possible. (Appendix - 6.4)
In reply, the office of the ADTP, Pune stated (December 2019) that city
survey sheets were not available, hence based on sanctioned development plan
of PMC/PCMC14, the value zone maps were prepared.
Reply is not tenable as in order to identify a property in ASR under a
particular value zone, it is necessary that its survey number or CTS number
should be the same in the ASR and in the value zone maps.
Recommendation: We recommend that all value zone maps may be updated
as per development plan with either CTS or survey number by obtaining city
survey maps from land records office to ensure proper identification and
correct valuation of the property.
6.4.7.7 Non-updation of value zones of mouza Ambernath
As per VG 38 of ASR 2015-16, ADTP office is empowered to prescribe rate
of properties for which no rate had been given in the ready reckoner or may
propose creation of a separate value zone.
In the ASR for the year 2015-16, survey numbers 9368, 9371, 9374, 9467 and
9469 of mouza Ambernath under Ambernath municipal council, district Thane
were classified under zone number 7/24 (for undeveloped properties) with
land rate of ` 2,400 per sqm only. The rates of residential flat, office and shop

14
Pimpri Chinchwad Municpal Corporation

93
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

were not mentioned. The office of the ADTP, Konkan clarified

(January 2016) that the said survey numbers be classified under zone number
7/22 of the ASR 2015-16 wherein rates of all types of properties were
specified.
However, Audit observed (September 2019) from the records of the office of
the ADTP, Konkan that the said survey numbers were still classified under
zone number 7/24 in the ASRs for the year 2016-17 and 2017-18.
On being pointed out (September 2019) the office of the ADTP, Konkan
accepted that the change was not incorporated in the ASR for the year 2016-17
and 2017-18 inadvertently due to heavy work load and shortage of manpower
and agreed to update the same in the ASR for the year 2020-21.
The fact remains that in spite of clear directives from the ATDP office, the
property remained misclassified in ASR.
6.4.7.8 Misclassification of survey numbers fronting highways in zones of
lower rates in the ASR
Every year while circulating Annual Work Plan, the office of the JDTP is
directing DDTP/ADTP offices to update value zone maps so that all the
survey numbers were properly classified under appropriate value zones. In
2016, the IGR Office also provided data of maps and survey numbers fronting
highways prepared by Maharashtra Remote Sensing Application Centre
(MRSAC) to all the ADTP Offices.
In cross verification (July 2019 and September 2019) of MRSAC data and
maps with survey numbers of ASR in the offices of the ADTP, Pune, and
Konkan, it was observed that some properties were misclassified or classified
under more than one value zones as detailed in (Appendix- 6.5).
In reply the office of the ADTP, Konkan accepted (September 2019) the
discrepancy and agreed to rectify the same in ASR 2020-21. The office of the
ADTP, Pune in case of Chakan nagar parishad stated (July 2019) that it could
not be ascertained from survey numbers as to which portion was fronting the
highway, thus, all four survey numbers were incorporated in two value zones
to avoid discrepancy.
The reply is not acceptable, as these four survey numbers were incorporated in
only one zone i.e. zone No.4 in ASR @ ` 6,100 per sqm. But the same were
classifiable in zone No.3 @ ` 7,000 per sqm fronting National Highway 50.
Recommendation : For correct classification of properties in ASR,
MRSAC maps may be used for finalization of value zones.
6.4.7.9 Irregular increase in ASR rates in spite of decrease in average
sale price
As per Valuation Rules 4(1), ASR shall be prepared showing average rate of
land and building situated in every tahsil, municipal corporation and local
body area. JDTP office is issuing instructions to the offices of the
DDTP/ADTP for preparation of average sales plan of transactions registered
under Article 25.

94
 Chapter VI - Stamp Duty and Registration Fee

The scrutiny (August and September 2019) of ASR for the period 2014 to
2016-17 of Mumbai and Thane districts revealed that there was persistent
decrease in average sales consideration for three years (2013 to 2015) in six
value zones and for two years (2013 and 2014) in three value zones.
Similarly, in Thane district, there was decrease in average sales consideration
in nine value zones during 2016-17 as shown in Table 6.4.7.9:
Table 6.4.7.9: Statement showing decrease in sales values and increase in ASR Rates
Sl. Name of Current Number of Range of Range of Reference
No. Office year of zones where average average per Appendix
ASR there was per cent cent
average decrease increase
decrease in in rates in given in
sales value previous ASR for the
in previous year current year
year
1 DDTP, 2014 9 1.5 to 17.4 5.0 to 15.07 6.6
Mumbai 2015-16 9 3.4 to 14.1 5.02 to 20.0 6.7
3.02 to
2016-17 9 5.4 to 16.5 6.8
10.03
2 ADTP,
2016-17 9 4 to 65 2 to 10 6.9
Konkan
Source: Information submitted by the offices of the DDTP, Mumbai and ADTP, Konkan
Audit observed (August and September 2019) that in spite of decrease in
average rate of land and building, ASR rate were increased in subsequent
years in Mumbai and Thane districts.
The offices of the DDTP, Mumbai and ADTP, Konkan in reply stated
(September 2019) that the average sale value is calculated considering both
decrease as well as increase in sales value. It also depends on the local
enquiry, potential of that area etc.
Reply is not acceptable, as the valuation rules stipulate for preparation of ASR
on the basis of average rate of land and building which may be either
increasing or decreasing in trend.
Thus, increase in ASR rates inspite of decrease in average annual rates had
resulted in unnecessary burden of taxation on common people.
Recommendation: The Depatment may streamline the process for preparation
ASR on the basis average rate of land and building, by doing trend analysis of
increase or decrease in rates.
6.4.8 Audit findings on uniformity, completeness, clarity in
preparation of valuation guidelines of ASR
6.4.8.1 Lack of uniformity in calculating depreciation on old buildings
between Mumbai, MSD and rest of Maharashtra
As per Valuation Guideline (VG) 4 applicable to Mumbai and MSD, for
valuation of old buildings after depreciation, the value of land should be
deducted from the value of building and depreciation should be allowed on
difference between value of land and value of building i.e. value of
construction only. This means depreciation should be allowed only on
construction cost and not on land cost. Whereas, as per VG 3 which is
applicable to rest of Maharashtra, the valuation of old building is being done

95
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

on specified percentage as given in the table under VG 3 depending on the age

of building on prevailing value of building. This includes land cost as well as
construction cost. Thus, in VG 3, the depreciation is allowed on land cost
also. Further, VG 6 applicable to rest of Maharashtra provides for the
valuation of properties, where ASR does not prescribe separate rates or where
the valuation according to VG 3 is less than the value of land. In such cases,
as per VG 6, valuation of building should be (i) value of land + (ii) value of
construction after depreciation. Thus, in VG 6, the depreciation is allowed
only on rate of construction.
As land is assumed to have an unlimited useful life, it never gets depreciated.
Thus, provision of depreciation on value of land as provided in VG 3 was
incorrect. This shows that there is no uniformity in cases of valuation of old
buildings between Mumbai, MSD and rest of Maharashtra (Appendix-6.10).
Scrutiny in test check of nine instruments of rest of Maharashtra, adjudicated
by the office of the JDR, Thane and Pune City and six instruments registered
in SR offices of Pune and Thane districts revealed that SD of ` 2.19 crore
(Appendix – 6.11) was foregone. In these cases, the value of old building was
arrived at with the application of the provisions of VG 3 i.e. depreciation was
allowed on the value of land also.
On being pointed out, the office of the IGR stated (June 2019) that the land
rates in ASR for rest of Maharashtra were considered based on 1.5 Floor
Space Index (FSI15) in some gaothan and congested areas. Therefore, in such
areas, there was no difference between land rate (valuation of land) and flat
rate (valuation of building). Thus, if depreciation is charged excluding
valuation of land, the value of building available for depreciation would be nil
and benefit of depreciation on such building would be denied. IGR office
further stated that in such cases, in order to ensure that land value does not get
depreciated, VG 6 is made applicable.
The reply is not tenable, as the provision made in VG 6 (rest of Maharshtra) is
same as VG 4 (Mumbai and MSD) i.e. depreciation is allowed on construction
cost of building excluding land cost. However, in test checked cases, where
land cost and construction cost were not same, audit observed that the
application of VG 3 for arriving at the valuation of old building after
deduction of depreciation has resulted in undervaluation of the buildings, as
depreciation was allowed on land cost also.
This proves lack of uniformity, as application of VG 3 is resulting in
undervaluation of old building after deduction of depreciation. However,
VG 4 is adequate for correct valuation of such buildings in every case for
entire Maharashtra.
6.4.8.2 Lack of uniformity in valuation for considering Transferrable
Development Right potential
As per provisions of the notification issued by UDD in May 2016 and
Development Control Rules 2017 of PMC, the purchaser is entitled to

15
Floor Space Index (FSI) means the quotient of the ratio of the combined gross floor area
of all floors, excepting area specifically exempted under Development Control
Regulations, to the gross area of the plot

96
 Chapter VI - Stamp Duty and Registration Fee

additional FSI and Transferrable Development Right (TDR16) based on the

width of road facing the land. This results in increase in permissible built up
area.
Further, as per VG 3 of ASR for Mumbai region, for the purpose of valuation,
the land rate is to be increased by 40 per cent in Mumbai sub-urban district for
all types of instruments i.e. conveyance, development agreement, etc. wherein
TDR potential is considered. Whereas, as per VG 31 for rest of
Maharashtra,17 in respect of only development agreements relating to sharing
of built-up area or sale proceeds, the land rate is to be increased by 25 per cent
in case of TDR potential.
This shows that at present, there exist different provisions for Mumbai region
and rest of Maharashtra for instruments of land having TDR potential18.
Thus, there is absence of uniformity not only with regard to provision for
types of instruments but also with regard to rate of increase on account of its
TDR potential.
Test check of 16 instruments of agreement to sale/conveyance of land in five19
SR offices (14 instruments) of Pune and one20 SR office (two instruments) of
Thane district revealed (July to December 2019) that even though, the
purchaser was entitled to 0.50 additional FSI and TDR based on width of the
road facing the land, the said pieces of land were valued as per ASR rate
without considering its FSI and TDR potential. This resulted in SD foregone
of ` 4.14 crore (Appendix–6.12) in those 16 instruments.
In reply, SR offices stated (July to December 2019) that the valuation was
done as per the existing VG and there was no instruction to consider TDR
potential of land on instruments other than development agreement in rest of
Maharashtra. IGR office stated that most of the developments were
horizontally spread and there was less demand for TDR in rest of Maharashtra.
IGR office further stated that VG 31 was introduced for the first time in 2014
and there were no land transactions showing increase in land rates, hence the
increase in land rate was kept as 25 per cent.
Reply is not acceptable, as in all major municipal corporations21 having
sanctioned development plan, TDR was allowed on all pieces of land fronting
a main road, starting from a minimum 0.40 times of net plot area for nine
meter wide road to 1.40 times of net plot area for 30 meter or more wide road.

16
Transferrable Development Right (TDR) is compensation in the form of FSI or
Development Right which shall entitle the owner for construction of built-up area subject
to provision of Development Control Regulation
17
in Aurangabad, Bhiwandi-Nizampur, Kalyan-Dombivali, Mira-Bhainder, Nashik,
Nagpur, Pimpri-Chinchwad, Pune, Thane and Vasai-Virar municipal corporations
18
Provision in the Development Control Regulation to load transferrable development right
on the land based on width of the road facing the property. As a result the maximum
building potential increases to that extent. TDR is either generated due to surrender of
some portion of land on account of its reservation in sanctioned development plan of the
area or may be procured from market on payment of premium/price
19
Jt. SRs – Haveli, Pune-III,XI, XVIII, XX, and XXII
20
Jt. SR, Kalyan -IV
21
in Aurangabad, Bhiwandi-Nizampur, Kalyan-Dombivali, Mira-Bhainder, Nashik,
Nagpur, Pimpri-Chinchwad, Pune, Thane and Vasai-Virar municipal corporations

97
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

Apart from this, an additional FSI of 0.50 is also admissible on payment of

premium. This increases the permissible built up area. In addition, such land
also gets enhancement in commercial potential, being road facing.
Test check of records (55 instruments of 2014 to 2019) of conveyance in five
SRs revealed that there was increase in the value of consideration by more
than 24 to 1,280 per cent than market value as shown in Table 6.4.8.2:
Table 6.4.8.2: Statement showing range of consideration more than
market value
Sl. No. Name of SRO No. of Range of consideration
instruments more than market value
(in per cent)
1 Jt. SR, Haveli XXVI 8 38 - 406
2 Jt. SR, Haveli XVIII 10 255 - 404
3 Jt. SR, Thane V 6 70 - 250
4 Jt. SR, Mulshi II 20 24 - 676
5 Jt. SR, Bhiwandi I 11 29 - 1,280
Total 55
Source: Information submitted by the offices of the Jt.SR concerned

This shows that the absence of provisions for rest of Maharashtra to increase
land rate in cases of land having TDR potential resulted in undervaluation of
those lands.
Recommendation: Valuation guideline for calculation of depreciation and
impact of additional FSI/TDR may be applied uniformly throughout the state.
6.4.8.3 Absence of impact of TDR potential in calculation of owner’s
consideration in development agreement
(i) Sharing of constructed area
As per VG 23 of ASR for Mumbai region and 32 for rest of Maharashtra,
valuation of development agreement relating to sharing of constructed area
should be done as under:
(a) Consideration value of owner’s share -Value of owner’s share of
area at construction cost given in ASR + consideration in cash or kind i.e.
interest on security deposit, development charges etc.
(b) Market value of developer’s share–Value of developer’s share of
area at land rate22 given in the ASR
Value at (a) or (b) whichever is more.
In the above formula, the land rate was considered for determining market
value of developer’s share, hence if valuation was done by applying VG 3 or
3123, it would have impact only on the value of developer’s share. TDR
potential of a land increases the total buildable area. Thus, there would be
increase in the value of owner’s share too, where sharing is on percentage
basis. But this aspect is not covered in VG 3 or 31.

22
as the construction cost of area to be built is incurred by the developer
23
as stated in para No.6.4.8.2 on pre-page

98
 Chapter VI - Stamp Duty and Registration Fee

Test check of records in the 1424 offices in 4925 instruments of development

agreements involving sharing of built up area between developer and owner
having provisions of loading of TDR potential revealed (January to
November 2019) that increased benefit due to TDR was not reflected in
valuation of owner’s consideration with application of VG 31 in rest of
Maharashtra. This resulted in foregone SD of ` 18.60 crore (Appendix – 6.13).
In reply, IGR office stated (September 2019) that suitable provisions are
available and total built up area including TDR has to be considered for
sharing between land owner and developer.
The reply is not acceptable, as VG 3 or 31 envisage for increasing the rate of
land only and does not say anything in respect of the sharing of construction
area between them.
(ii) Sharing of sale proceeds
Similarly, as per VG 24 of ASR 2017-18, for Mumbai region and VG 33 for
rest of Maharashtra, valuation of development agreement relating to revenue
sharing (sale proceeds) should be done as under:
(a) Consideration value of owner’s share –Current value of owner’s share
in terms of the rate of sale having regard to the permissible use thereof
x 0.85 + consideration in cash or kind i.e. interest on security deposit,
etc.
(b) Market value of entire land area at land rate of ASR
Value at (a) or (b) whichever is more
In the above formula, as land rate was considered at (b) for determining
market value of entire land, hence if valuation is done by applying VG 3 or
3126, it would have impact only on the land value. TDR potential of a land
increases the total buildable area. As a result, there would be increase in the
value of owner’s share too, where sharing is based on percentage basis. But
this aspect is not covered in VG 3 or 31.
Test check of 1227 instruments of development agreements involving sharing
of sale proceeds between developer and owner having provisions of loading of
TDR potential revealed that increased benefit on account of TDR was not
reflected in the valuation of owner’s share with application of VG 31 in rest of
Maharashtra. This resulted in foregone SD of ` 7.47 crore (Appendix – 6.14).
In reply, IGR office stated (September 2019) that suitable provisions are
available and total built up area including TDR has to be considered for
sharing between land owner and developer.
The reply is not acceptable, as VG 3 or 31 envisage for increasing the rate of
land only and do not say anything in respect of the valuation of construction
area for sharing of proceeds between them.

24
Jt.SR, Bhivandi-I; IGR, Pune; JDR Pune (City); JDR, Thane (City); Jt.SRs Haveli-
I,III,XI, XVII, XXII, XXVI; Jt.SR, Mulsi-II and Jt.SRs, Kalyan-II, III, V
25
Pune district (30) and Thane district (19)
26
as stated in paragraph No.6.4.8.2 on pre-page
27
Pune district (9) and Thane district (3)

99
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

6.4.8.4 Under-consideration of TDR potential in calculation of

developer’s consideration in development agreement
(i) Sharing of constructed area
As per VG 23 of ASR for Mumbai region and 32 for rest of Maharashtra,
valuation of development agreement relating to sharing of constructed area
should be done as under:
(a) Consideration value of owner’s share -Value of owner’s share of
area at construction cost given in ASR + consideration in cash or kind i.e.
interest on security deposit, development charges, etc.
(b) Market value of developer’s share – Value of developer’s share of
area at land rate28 given in the ASR
Value at (a) or (b) whichever is more
It may be noted that in the above formula, land rate was applied for
determining market value of developer’s share in terms of area, hence if
valuation is done by applying VG 3/3129, it would have impact only on market
value of the developer’s share. TDR potential of a land increases the total
buildable area (including basic FSI, additional FSI, loading of TDR, etc.). As
a result, there would be increase in the value of developer’s as well as owner’s
share where sharing is based on percentage basis.
Government sanctioned following maximum permissible TDR loading for
plots fronting various road widths shown in Table 6.4.8.4 (A) and
Table 6.4.8.4 (B):
Table 6.4.8.4 (A): Maximum permissible TDR loading in addition to original plot area
in Mumbai city and MSD
Plot fronting on road width Maximum permissible TDR loading in addition to original
plot area
TDR in island city TDR in sub-urban / extended sub-
(Mumbai city) urban
Nine meter and above 0.17 0.50
but less than 12.20 meter
12.20 meter and above 0.37 0.70
but less than 18.30 meter
18.30 meter and above 0.57 0.90
but less than 30 meter
30 meter and above 0.67 1.00
Source : UDD notification (November 2016)

28
as the construction cost of area to be built is incurred by the Developer
29
as stated in paragraph number 6.4.8.2 on pre-page

100
 Chapter VI - Stamp Duty and Registration Fee

Table 6.4.8.4 (B) : Maximum permissible TDR loading in addition to original plot area
in rest of Maharashtra
Plot fronting on road width Maximum permissible TDR loading in
addition to original plot area
9 meter and above but less than 12 meter 0.40
12 meter and above but less than 18 meter 0.65
18 meter and above but less than 24 meter 0.90
24 meter and above but less than 30 meter 1.15
30 meter and above 1.40
Source : UDD notification (May 2016)
In case of provision of loading of TDR, VG 3 provide for increase in rate of
land by 25 per cent for Mumbai city and by 40 per cent for MSD. Similarly,
for rest of Maharashtra, VG 31 stipulates increase in rate of land by
25 per cent. However, actual increase as permitted by Government as stated
above is not calculated while valuing the share of developer.
Audit observed that actual increase in value of land was to the extent of 50 to
75 per cent in MSD and 32 to 86 per cent in rest of Maharashtra
(Appendix- 6.15 (A) and 6.15 (B)).
Audit observed that in Mumbai, the above increase in value of land due to
additional permissible loading (including basic FSI, additional FSI, loading of
TDR, etc.) as per the provisions of DCR was being considered while
calculating market value of the land in various instruments registered.
Test check of eight30 instruments of development agreement relating to
sharing of built-up area revealed (July to November 2019) that developer’s
share was not calculated based on actual permissible limits as per the
provision of DCR and only land rate was increased as per VG 3 and
31 resulting in SD foregone of ` 4.47 crore (Appendix – 6.16).
On being pointed out in audit, the offices of the JDRs and SRs stated that
valuation was done as per existing VG and comments of the higher authority
would be obtained.
Recommendation: Valuation guidelines may be suitably modified to
consider impact of TDR/FSI potential as per the provisions of DCR in owner’s
as well as developer’s share and applied uniformly throughout the state.
(ii) Sharing of sale proceeds
As per VG 24, for Mumbai region and VG 33 for rest of Maharashtra of ASR,
valuation of development agreement relating to revenue (sale proceeds)
sharing should be done as under:
(a) Consideration value of owner’s share - Current value of the land
owner’s share in terms of the rate of sale having regard to the permissible user
thereof x 0.85 + consideration in cash or interest on deposit etc.
(b) Valuation of the whole land at the rate of land mentioned in the
ASR
Value at (a) or (b) whichever is more.

30
Two – JDR office of Thane and six – SR offices of Pune

101
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

Audit observed that VG 24 and 33 do not consider the valuation of

developer’s share and the owner’s share is compared with valuation of whole
land for the purpose of levy of SD. Instead, the valuation of owner’s share as
well as developer’s share of a project after considering all other permissible
additions on account of loading of TDR, FSI and fungible FSI etc. should be
compared for the purpose of levy of SD.
Audit observed (February 2019 and June 2019) that value of developer’s share
in the sale proceeds of total built up area was five times of the value of whole
land in one of two31 test checked instruments and in another one, it was 1.07
times of the value of whole land. This resulted in SD foregone of
` 39.38 crore (Appendix – 6.17) due to non-consideration of value of
developer’s share for comparison with the owner’s share for levy of SD. Thus,
provision of VG 24 and 33 stipulating comparison of value of owner’s share
with valuation of whole land was not correct.
On being pointed out in audit (February 2019 and June 2019), both the COS
replied that they had done valuation as per existing VG and comments of the
higher authority would be obtained.
The issue was pointed out (July 2019) to the office of the IGR who stated that
in case of revenue sharing, the developer agrees to pay consideration as a
percentage of gross sale proceeds (entire revenue generated out of the project)
in lieu of handing over entire land, hence the market value of entire land area
was valued at land rate as per VG 33.
Reply is not tenable as the sale proceeds of the entire project are shared
between owner and developer, the SD was leviable on the greater share.
Recommendation: VG 24 of ASR of Mumbai region and VG 33 of rest of
Maharashtra may be suitably modified to compute the market value of
developer’s share in the total buildable area (at land rate of ASR) as per terms
of the agreement.
6.4.8.5 Non-consideration of TDR potential in valuation of owner’s
share in Integrated Township Project
In special township project, a development company is formed by all
landowners having equity according to their landholdings for a development
project. Equity and share in income corresponds to their area of land in the
project. For the valuation of such joint development agreement, the office of
the IGR issued (June 2018) instructions for properties located in rest of
Maharashtra as under:
(a) Owner’s share in gross sale proceeds
Total area of special township x residential building rate as per ASR x share
in the gross sale proceeds of the owner /100 x owner’s land area / Total area of
special township x 0.85 + cash consideration and interest on deposit
(Or)
(b) Valuation of land area of owner as per ASR
Value at (a) or (b) whichever is more.

31
Offices of the COS, Borivali and COS, Mumbai

102
 Chapter VI - Stamp Duty and Registration Fee

Thus, the above instructions envisage that the valuation of owner’s share
would be calculated as per above formula and provisions of VG 31 would be
applied in cases where FSI/TDR potential is available.
However, as per para 7.2.2 of Regulation for Development of
Special/Integrated Township32 Project, in case of integrated /special township,
the basic permissible FSI shall be 1.0. Further, following built up area as
mentioned in table below shall be permissible on payment of premium at the
rate of 10 per cent33 of the weighted average rate of the said land as prescribed
in ASR as shown in Table 6.4.8.5:
Table 6.4.8.5: Additional built-up permissible on payment of premium for area under
township
Area under township Additional built-up area on payment of
premium
40 ha and up to 200 ha Up to 70 per cent of basic permissible FSI
More than 200 ha and up to 500 ha Up to 80 per cent of basic permissible FSI
More than 500 ha. Up to 100 per cent of basic permissible FSI
Source: UDD Notification (November 2018)
Thus, above additional FSI needs to be considered in the valuation of share of
land owner. However, IGR office did not consider this aspect which may
result in undervaluation of the share of land owner.
The above shortcoming was pointed out (February 2020) to IGR. Reply was
awaited.
Case study-I
Scrutiny of records of the office of the SR, Haveli-III, Pune revealed
(December 2019) that adeveloper executed (July 2018 to September 2018)
eight instruments of development agreements with 63 land owners for
construction of an integrated township over a land admeasuring 210.3951 ha at
Kadamwakwasti, tahsil Haveli, district Pune. Gross sale proceeds of built up
area constructed in the integrated township was agreed to be shared between
land owners and developer in the ratio of 30 per cent and 70 per cent
respectively. The developer was given the right to amalgamate the properties
and obtain and utilize TDR, paid FSI/additional FSI that may be permitted by
the sanctioning authorities. The cost of additional FSI was deductible from
the share of the land owners.
Audit observed that for the purpose of levy of SD, the valuation of owner’s
share was done in accordance with IGR’s instructions (June 2018) considering
the owner’s land area. However, the benefit of additional built-up area of 80
per cent over and above the basic permissible FSI on payment of premium as
per provisions of development regulations was not considered in valuation of
owner’s share. This resulted in SD foregone of ` 9.47 crore (Appendix–6.18).
On being pointed out, the SR office stated that reply would be furnished after
obtaining guidance from the office of the JDR, Pune city. The observation

32
made effective by notification (December 2016) and further amended vide notification
(November 2018) issued by the UDD
33
20 per cent as per notification (December 2016) which was reduced to 10 per cent by
notification (November 2018)

103
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

was also communicated to the office of the IGR (March 2020); reply was
awaited.
Recommendation : Circular issued (June 2018) by the office of the IGR
may be modified in view of additional benefits provided in development
regulations of integrated township for valuation of owner’s share in gross sale
proceeds.
6.4.8.6 Lack of uniformity and incorrect provision for valuation of
buildable public reservation of land in the development plan
As per VG 22 (a) of ASR for Mumbai region and VG 30 of the ASR for rest
of Maharashtra, out of the total land mentioned in the instrument, land
reserved under sanctioned development plan, should be valued at 80 per cent
of land rate only. Further, as per VG 22 (b) of ASR for Mumbai region,
valuation of buildable reservation of land for specified purposes viz. school,
hospital, shopping centre etc. as shown in the development plan should be
done as per VG 22(a) i.e. at 80 per cent of land rate and bulk land benefit as
per VG 1734 (rebate of 15 per cent) should be given thereon and net (effective)
land rate should be increased by 40 per cent for TDR potential. However, no
such VG has been provided for rest of Maharashtra.
Audit observed that land with buildable reservations in the sanctioned
development plan has a TDR potential both in Mumbai region and rest of
Maharashtra as well. As there is no VG for rest of Maharashtra similar to
VG 22(b) of ASR for Mumbai region for buildable reservations of land in the
development plan, there is lack of uniformity between the two ASRs on this
aspect (Appendix–6.19).
The above observation was communicated to the office of the IGR
(March 2020); reply was awaited.
Recommendation : Applicability of VG 22(b) of ASR for Mumbai region
may be uniformly adopted for rest of Maharashtra.
6.4.8.7 Absence of provision in VG 5 for valuation of large housing
project in areas outside municipal corporation/council
As per VG 5 (b) of the ASR for rest of Maharashtra, if a large housing project
having area of two ha to 10 ha is located in Thane/ Kalyan-Dombivali/
Bhiwandi-Nizampur/ Ulhasnagar/ Mira-Bhaiyandar/ Navi-Mumbai/ Vasai –
Virar/ Pune/ Pimpari-Chinchvad/ Nashik/ Aurangabad and Nagpur municipal
corporation and no separate value zone in the ASR was available, then market
value of the residential/shop/office located therein would be increased by
105 per cent and if the area of large housing project is more than 10 ha, then
the increase would be by 110 per cent. Similarly, for remaining municipal
corporations/councils, if a large housing project having area of 1.00 ha to
2.00 ha and no separate value zone was available in ASR, then market value of
the residential/shop/office located therein would be increased by 105 per cent
and if the area of large housing project is more than two ha, then the increase
would be by 110 per cent.

34
Allowing a rebate of 15 per cent in land rate, for land area above 2,500 sqm

104
 Chapter VI - Stamp Duty and Registration Fee

Audit observed that there were many large housing projects outside the
municipal corporation/council limits but within influence zone with land area
of more than one ha and two ha. However, those projects were outside the
purview of VG 5 (b) for the purpose of valuation.
Audit scrutiny (October and November 2019) of two35 offices revealed that in
six36 instruments, large housing projects having area above one ha were
proposed outside municipal corporation/council area but due to non-
applicability of VG 5(b), extra five to ten per cent charges could not be levied
on properties located in said projects resulting in SD foregone of ` 93.44 lakh
(Appendix–6.20).
On being pointed out in audit, the offices of the JDR, Pune (Rural) and
JDR, Thane (Rural) replied (October and November 2019) that they have done
valuation as per existing VG and comments of the higher authority would be
obtained.
Audit pointed out (March 2020) the lacunae in VG 5(b) to IGR; reply was
awaited.
Recommendation: VG 5 (b) of the ASR for rest of Maharashtra may be
modified to include the large housing projects having area of minimum one ha
of land located outside municipal corporation/council area also.
6.4.8.8 Absence of provision in VG for computing consideration value
of parking given free of cost in development agreement
As per the norms of the DCR of municipal corporations of selected districts,
there shall be a provision for parking of vehicles as per the scale laid down
therein in cases of development or redevelopment of a property. Accordingly,
the valuation of these parking spaces were required to be considered
separately while arriving at the valuation of owner’s share mentioned in the
development agreement. However, there is no provision/guideline in the
ASRs for valuation of parking space which is allotted to owner free of cost in
addition to the built up area.
Scrutiny of 36 development agreements in ten37 offices revealed that in
27 instruments, the valuation on account of parking space was considered
while arriving at the share of the owner, but the method of calculation was not
uniform. In remaining nine cases, the valuation of parking space given to
owner was not considered in owners share. Thus, due to absence of specific
provision for consideration of parking space, the valuation of owner’s share
was deficient.
On being pointed out (May 2019) the office of the IGR stated (June 2019) that
the present system of calculating parking area based on standard given in the
DCR is adequate. He further stated that revision of parking norms are under
consideration of UDD. Thereafter, the issue would again be examined for
issue of necessary guidelines in ASR for 2020-21.

35
JDR, Pune (Rural) and JDR, Thane (Rural)
36
Three in Pune (Rural) and three in Thane (Rural) district
37
COS- Andheri, Borivali, Kurla and Mumbai; JDR – Pune (City); Pune (Rural); Thane
(City); Thane (Rural), ; SR- Borivali-III and Ulhasnagar-III

105
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

Reply was not acceptable as Audit observed no uniformity for valuation of

parking spaces in test checked development agreements. Further, there is no
VG specifying the method and rate for calculation of parking space as per the
provisions of DCR presently.
Recommendation: Government may prescribe specific method and rate for
valuation of parking spaces.
6.4.8.9 Ambiguous provision in VG 19 for IT users
VG 19 of ASR for Mumbai region as well as for rest of Maharashtra stipulates
that ASR rates should be increased in percentage as specified therein over and
above the ASR rates floor-wise in multistoried building. However, the shop
and IT user units in such multistoried building are exempted from the above
increase in rates.
Scrutiny of Maharashtra’s Information Technology/Information Technology
Enabled Services (IT/ITES) Policy - 201538 revealed that various incentives
and provisions are made for IT parks/IT SEZs/Audio-Visuals-Gaming and
Comics (AVGC) parks such as additional FSI up to 200 per cent, exemption in
stamp duty, concession in electricity duty, property tax, etc. to promote
IT/ITES sector in the State.
As seen from above, the exemption enumerated in IT/ITES Policy 2015 are
available to such unit which is so certified by implementing agency or any
other officer authorized by it in this behalf.
However, VG 19 stipulates exemption from lift charges to shops and IT user
units. The word ‘shop’ and ‘IT user unit’ is not defined by the department and
thus, there is ambiguity as to identify the ‘type of shop’ and ‘IT user unit’.
The shop may not be related to IT activity. Similarly, ‘IT user unit’ may be a
manufacturer, service provider or IT service consumer.
The ambiguity was pointed out (March 2020) to the office of the IGR; reply
was awaited.
Recommendation: Department may remove ambiguity regarding the term
‘shop’ and ‘IT user unit’ used in VG 19.
6.4.9 Inadequate Internal Control Mechanism
The office of the JDTP is required to prepare ASR and to submit the same to
IGR office for approval by last day of February of each year for issue on the
1st day of April each year. A separate valuation cell headed by the JDTP has
been formed for preparation of ASR. The ASR is prepared by taking inputs
from i-SARITA data base and various authorities like municipal corporations,
offices of the Dy. Director of land records, MIDC, district collectorates and
notifications issued by UDD etc. The revision in rates of properties for a year
is decided by computing average increase/decrease in the consideration of the
properties as compared to market value in previous year and by holding
discussions with the stake holders, local representatives.
The scrutiny of records at office of the IGR (December 2019) revealed that the
planning for the work of preparation of ASR is done in the form of Annual

38
Issued by Industries Department, Government of Maharashtra

106
 Chapter VI - Stamp Duty and Registration Fee

Work Plan. The due dates of various stages of works of preparation of ASR
for the year 2018-19 issued by the office of the JDTP are shown in Table
6.4.9:
Table 6.4.9: Details of various stages preparation of ASR and due date
Stages of work Due date
Collection of information from various sources By the end of June 2017
Consolidation, sequencing, classification and analysis of By 10 October 2017
information
Analysis of information and preparation and submission of 10 January 2018
draft ASR to JDTP office
Finalization of proposals of ASR and conduct of meeting Between 15 and 31
with local representatives under the chairmanship of district January 2018
collector for discussion on revised proposal of ASR
Preparation and submission of draft ASR as per modification By 10 March 2018
suggested in meeting of local representatives as well as after
consideration of instructions of offices of JDTP and IGR
Preparation of final ASR By 15 March 2018
Printing and C.D. cutting of ASR By 20 March 2018
Certification and publication of ASR By 25 March 2018
Source : Information furnished by the office of the JDTP, Pune
However, it was observed that the periodical return to monitor achievement of
above stages was not prescribed. Further, there exists no internal audit
mechanism/wing to monitor the process of preparation of ASR at JDTP office
level.
The office of the IGR stated (January 2020) that there was no such internal
audit wing in JTDP office, as the progress of achievement of the targets given
in the Annual Work Plan for preparation of ASR were monitored through
periodic review meetings and no periodic return prescribed.
Audit pointed out various deficiencies in collection of required information
viz. non-updation of NA status, classification and updation of survey numbers,
analysis of data and non-consideration of high value transactions for
preparation of ASR in paragraphs 6.4.7.1 to 6.4.7.10. Similarly, Audit
observed various omissions in framing VGs as pointed out in
paragraphs 6.4.8.1 to 6.4.8.9.
This could have been avoided if periodical returns for watching the targets had
been prescribed and inspections by internal audit team were done. This would
have served as a feedback mechanism for knowing various problems and
lacunae encountered in the implementation of instructions.
This shows the absence of mechanism for monitoring the work of preparation
of ASR in the department.
6.4.10 Conclusion
There was absence of system of validation of input data used for preparation
of ASR. Completeness check was absent. Neither SRs were submitting
required data manually nor was complete information available in iSARITA.
Changes in use of land permitted by revenue authorities were not updated in
ensuing ASRs. The system to ensure timely receipt of information regarding
changes in survey numbers due to fragmentation or amalgamation authorized

107
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

by land records department and its proper classification in the ASR was
absent.
In spite of decrease in average rate of land and building, ASR rates were
increased in subsequent years in Mumbai and Thane districts. There was lack
of uniformity in method of calculating depreciation on old buildings between
Mumbai, MSD and rest of Maharashtra. Valuation guidelines stipulating rate
of increase in valuation on account of its TDR potential in Mumbai, MSD and
rest of Maharashtra are not uniform. Further, valuation of increased built up
area due to loading of additional FSI and TDR as per provisions of DCR was
not considered to arrive at market value of the owner’s and developer’s shares
in the development agreements. There was no VG in the ASR for rest of
Maharashtra similar to VG 22(b) of ASR for Mumbai region for buildable
public reservations of land in the development plan. Absence of provision for
computing consideration value of parking given free of cost in development
agreement was also observed. In VG 19, the terms ‘shop’ and ‘IT user unit’
were not clearly defined.
There was no internal control mechanism/wing to monitor the process of
preparation of ASR at JDTP office level. Periodic reporting system was not in
place to monitor the achievement of various stages of works of preparation of
ASR as stipulated in Annual Work Plan.

108
 Chapter VI - Stamp Duty and Registration Fee

COMPLIANCE AUDIT
During scrutiny of records of the various registration offices, we noticed
several cases of non-compliance of the provisions of the Maharashtra Stamp
Act, 1958 (MS Act) and Government notifications and instructions and other
cases such as short levy of stamp duty due to (i) undervaluation of property,
(ii) incorrect application of provisions of MS Act and ASR, (iii) non-
impounding instrument and (iv) irregular grant of remission. A few cases of
short levy of stamp duty to the tune of ` 17.48 crore are discussed in the
succeeding paragraphs. These cases are illustrative only as these are based on
a test check of records.
6.5 Short levy of stamp duty due to undervaluation of property
6.5.1 Development agreement - Revenue sharing
As per paragraph 684 of Maharashtra Registration Manual (MRM), Part-II,
where the developer offers to allot residential/non-residential components to
the owner in lieu of the development right, the value of the residential/non-
residential components should be calculated according to the prevailing rates
prescribed in the statistics on the day of execution of the agreement and the
duty and fees should be levied on the greater of the two values viz. the value of
the consideration component or the market value of the property. On such
instruments, stamp duty (SD) is leviable under provision contained in
Article 5 (g-a) (i) of MS Act. Further, as per Article 5 (g-a) (i) of MS Act, if
immovable property is given to a developer for development, construction,
sale or transfer then SD is leviable on conveyance39 under Article 25 (b) of the
said Act.
Further, as per instruction 33 of ASR for the year 2015 where the developer
offers to share revenue from sale of residential/non-residential units to the
owner in lieu of the development right, the value of the residential/non-
residential components should be calculated according to the prevailing rates
prescribed in the ASR and the consideration for the purpose of levy of SD
would be 85 per cent of owner’s share. This ratio was effective from
01 January 2015 onwards. Thus, up to 2015, the consideration for the purpose
of levy of SD would be 100 per cent and from 2015 onwards it was
85 per cent of owner’s share.
Audit observed short levy of SD amounting to ` 5.95 crore in 11 cases
(in six units) due to not working out the correct market value of property as
per the applicable provisions of ASR in the development agreements involving
sharing of revenue as elaborated below:
6.5.1.1 Instruments executed prior to 01 January 2015
In two SR Offices40, in three cases, the development agreements were
executed (2013-15) between ‘owners’ and ‘developers’ for development of

39
Conveyance means a conveyance on sale by which property, whether movable or
immovable, or any estate or interest in any property is transferred to, or vested in, any
other person, inter vivos, and which is not otherwise specifically provided for by
Schedule-I
40
Joint Sub Registrar, Haveli-VIII, Pune (Document Nos. 437/2014) and Joint Sub
Registrar, Haveli-XVII, Pune (Document Nos. 1307/2014, 311/2014)

109
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

land. The department levied SD of ` 1.26 crore on market value/consideration

of ` 19.44 crore. The basis on which consideration/market value was worked
out by the department was not found on record.
Audit observed (February 2016 and March 2016) that as per recital of these
three agreements, the owners and developers had agreed to develop the
properties on the basis of revenue sharing41 on percentage42 basis. The owners
share as per revenue sharing agreement worked out to ` 93.98 crore. Thus, the
consideration of the property in terms of revenue sharing was ` 93.98 crore on
which SD of ` 4.66 crore should have been levied against ` 1.26 crore levied
by the department. This resulted in short levy of SD of ` 3.39 crore
(Appendix-6.21).
The office of the IGR accepted (July 2019 to January 2020) the audit
observations in three cases and in one case (document No. 437/2014) an
amount of ` 10.19 lakh recovered out of ` 13.83 lakh.
6.5.1.2 Instruments executed after 01 January 2015
Scrutiny of instruments in offices of six43 SRs revealed (January 2017 to
January 2019) that in eight cases, the development agreements were
executed44 between ‘owners’ and ‘developers’ for development of land. The
department levied SD of ` 6.77 crore on market value/consideration of
` 135.17 crore. The basis on which consideration/ market value was worked
out by the department was not found on record.
It was observed that as per recital of the agreement, the owners and developers
had agreed to develop the properties on the basis of revenue sharing on certain
percentage45. The consideration of the property in terms of revenue sharing
worked out to ` 172.77 crore involving SD of ` 9.33 crore. Thus, there was
short levy of SD of ` 2.56 crore (Appendix–6.22).
The office of the IGR accepted (June 2019 and October 2019) the audit
observations in one case (document No. 5284/2015) an amount ` 16.85 lakh
was recovered as against ` 33.69 lakh.
Audit could not analyse the root cause for occurrence of irregularity, as the
basis adopted for consideration/market value by the department was not
available on the records.
6.5.2 Development agreement - Sharing of constructed area
Article 5 (g-a) of Schedule-1 of MS Act provides, in case of instrument
relating to giving authority or power to a promoter or a developer, by whatever
name called, for construction on development of or, sale or transfer (in any

41
Revenue realized from selling of constructed units in open market
42
Ranged between 39.89:60.11 and 50:50
43
Joint Sub Registrar, Haveli-IV, Pune (Document No. 5284/2015); Joint Sub Registrar,
Haveli-VIII, Pune (Document Nos. 5021/2017, 7317/2017,1842/2018); Joint Sub
Registrar, Haveli-XVII, Pune (Document No. 7362/2015); Joint Sub Registrar, Haveli-
XVIII, Pune (Document No. 6694/2017); Joint Sub Registrar, Karjat-II, Raigad
(Document No. 516/2015) and Joint Sub Registrar, Lonavala (Document No. 3134/2015)
44
March 2015, April 2015, September 2015, November 2015, April 2017, May 2017,
July 2017 and March 2018
45
Ranged from 31:69 to 50:50

110
 Chapter VI - Stamp Duty and Registration Fee

manner whatsoever) of, any immovable property, SD as is leviable on a

conveyance under clause (a), (b), (c) or (d) as the case may be, of Article 25
shall be charged on the market value of the property or consideration,
whichever is higher, which is the subject matter of transfer. Further, as per
instruction No. 32 of ASR, in case of development agreement the market value
shall be derived by calculating owner’s share (cost of constructed area plus
interest at the rate of ten per cent on security deposit) and developer’s share
and higher of these should be considered as market value.
Audit observed short levy of SD amounting to ` 2.71 crore in eight
development agreements (in eight units) due to incorrect consideration of
owner’s share as detailed below:-
6.5.2.1 Scrutiny of records at the office of the Joint SR, Haveli-III, Khed,
district Pune revealed (July 2018) that, a development agreement (document
No. 4053/2016) was executed (July 2016) between owner and developer for
development of land admeasuring 11,050 sqm bearing gat No.482 situated at
mouza Chakan within the limit of nagar parishad Chakan, district Pune for a
consideration of ` 10 lakh. The department had worked out the market value
of the property as ` 1.66 crore which was higher than the consideration, on
which SD at the rate of four per cent amounting to ` 42.36 lakh was levied.
As per clause 1 of agreement and correction deed executed between owner and
developer, 56,985 sqft (carpet) (i.e. 6,355.20 sqm) constructed area was agreed
to be given as owner’s share. In addition, developer had also given non-
refundable security deposit of ` 10 lakh to owner. Accordingly, the value of
owner’s share was worked out to ` 12.68 crore on which SD at the rate of four
per cent amounting to ` 50.73 lakh was leviable. Thus, non-working of
owner’s share as per instruction No. 32 of ASR has resulted in short levy of
SD of ` 8.37 lakh46.
6.5.2.2 Scrutiny of records at the office of the Joint SR-IV, Haveli, district
Pune revealed (February 2016) that, a development agreement (document
No.10875/2014) was executed (December 2014) between owner society and
developer for development of land admeasuring 823.30 sqm bearing survey
No.157 (city survey No. 433), Hissa No. A+B+C/1 situated at village Kothrud,
tahsil Haveli, district Pune within the limits of Pune municipal corporation for
a consideration of ` 2.53 crore. The department had worked out the market
value of the property at ` 2.65 crore and levied SD of ` 13.25 lakh.
As per clause 1(d), 7(d), 8(k), 9(f) and 21 of development agreement, the
developer had agreed to give total constructed area of 1,417.23 sqm (existing
area of 823.30 sqm and additional area47 of 434.93 sqm) along with
non-refundable deposit of ` nine lakh and other amenities48 to the 12 flat

46
(SD leviable - ` 50.73 lakh) - (SD levied - ` 42.36 lakh)
47
Additional area of retained flat – 41.83 sqm (1240.13 sqm – 823.30 sqm); terrace – 153.85
sqm; drying balcony -27.87 sqm ; society office – 13.38 sqm; two wheeler parking- 48
sqm and car parking - 150 sqm
48
Society office - ` 12.52 lakh; two wheeler parking - ` 11.23 lakh; car parking -
` 35.10 lakh; rent for 24 months - ` 43.20 lakh; shifting charges - ` three lakh; corpus
fund to society - ` 55.31 lakh; maintenance charges - ` 41.48 lakh; saleable block deposit
- ` 24 lakh; travel expenses - ` 2.70 lakh and brokerage charges - ` 4.08 lakh

111
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

owners. Accordingly, consideration amount was worked out to ` eight crore

on which SD at the rate of five per cent amounting to ` 40 lakh was leviable.
This resulted in short levy of SD of ` 26.76 lakh.
The office of the Joint District Registrar and Collector of Stamp, Pune (City)
accepted (October 2016) observation of Audit and directed SR offices to take
action for recovery of short levy of SD ` 27.05 lakh.
The office of the IGR, Pune stated (February 2020) that action under section
3249 was in progress.
6.5.2.3 Scrutiny of records at the office of the Joint SR-XXII, Haveli,
district Pune revealed (January 2017) that a joint development agreement
(document No.6319/2015) was executed (June 2015) between owner and
developer for development of land admeasuring 1.12 ha (i.e.11,200 sqm)
bearing survey No. 21A, hissa No.2 situated at village Sus, tahsil Mulshi,
district Pune for a consideration of ` 9.23 crore. The department had worked
out the market value of the property at ` 3.93 crore and levied SD of
` 46.14 lakh.
As per clause 2 of document, 47,000 sqft (i.e. 4,368.03 sqm) constructed area
was agreed to be given as owner’s share. In addition to this, developer had
also given refundable security deposit of ` 25 crore to owner. Accordingly,
the value of owner’s share was worked out to ` 31.73 crore on which SD at
the rate of four per cent amounting to ` 1.27 crore was leviable. Thus,
incorrect calculation has resulted in short levy of SD of ` 80.77 lakh50.
The office of the IGR accepted (July 2019) the audit observation.
6.5.2.4 Scrutiny of records at the office of the Joint SR-VII, Borivali
revealed (September 2015) that, a development agreement (document No.
9960/2013) was executed (December 2013) between owner and developer for
development of land admeasuring 2,271.04 sqm out of CTS No. 374 B (part)
situated at village Eksar, tahsil Borivali for consideration of ` 14 crore. The
department worked out market value of land at ` 14.24 crore and levied SD of
` 71.25 lakh.
As per clause 2 (iii) of the document, the parties had agreed that all costs of
procuring TDR/compensatory FSI (fungible FSI) and payment by way of
premium/charges for approval of plan would be borne by the owner alone and
as per clause 12 (b) of document, the owner had agreed to retain
26.58 per cent carpet area i.e. 1,824.33 sqm (consisting of 1,630.10 sqm
residential and 194.23 sqm commercial) and developer would be entitled to
73.42 per cent carpet area (consisting of 5,037.46 sqm residential and balance
saleable area). Further, it was agreed that in the event of reduction, if any, in
the total area, the area retained by the owner shall be reduced to the extent and
the area of the developer shall not be reduced. Therefore, the developer would
be entitled to minimum 5,037.46 sqm.

49
Section 32 of MS Act provides certification by collector regarding payment of SD on
instrument brought to him under section 31 (adjudication case)
50
(SD leviable - ` 1.27 crore) - (SD levied - ` 46.13 lakh)

112
 Chapter VI - Stamp Duty and Registration Fee

Accordingly, the market value of developer’s share was worked out to

` 27.08 crore on which SD at the rate of five per cent amounting to
` 1.35 crore was leviable on developer's share being higher than consideration.
This resulted in short levy of SD of ` 64.16 lakh.
The office of the IGR accepted (August 2019) the audit observation.
6.5.2.5 Scrutiny of records at the office of the Joint SR-VIII, Haveli, district
Pune revealed (January 2019) that a development agreement (document
No.7219/2017) was executed (July 2017) between owner and developer for
development of land admeasuring 0.89 ha (i.e. 8,900 sqm) bearing survey
No.38, hissa No. 8 B situated at village Balewadi, tahsil Haveli, district Pune
within the limit of Pune municipal corporation for a consideration ` 18 crore.
The department worked out the market value of the property at ` 18.83 crore
and levied SD of ` 94.16 lakh.
As per clause 5(b) and (f) of document, developer agreed to pay ` 15 crore in
cash and salable construction area admeasuring 33,000 sqft (3,066.91 sqm) as
owner’s share. Further, as per clause 7(a) developer was entitled to load
FSI/TDR as per Development Control Rules. Accordingly, the value of
owner’s share was worked out to ` 22.42 crore on which SD at the rate of
five per cent amounting to ` 1.12 crore was leviable. However, department
levied SD of ` 94.16 lakh which resulted in short levy of SD of ` 17.95 lakh.
The office of the IGR accepted (September 2019) the audit observation.
6.5.2.6 Scrutiny of records at office of the Joint SR-II, Karjat, district
Raigad revealed (June 2018) that a joint development agreement (document
No. 889/2016) was executed (April 2016) between owners and developer for
development of land admeasuring 19,770 sqm51 situated at village Wadawli
Tarfe Vardi, tahsil Karjat, district Raigad for a consideration of ` 10.44 crore.
The department worked out the market value of the property at ` 10.44 crore
and levied SD of ` 41.76 lakh.
As per clause 7.3 of the agreement, the developer would be liable to bear the
development cost of the project. As per the clause 6.2, owner No.1 and
developer were entitled to 3,888 sqm and 9,077 sqm built-up area respectively
and as per clause 6.3, owner No.2 and developer were entitled 2,043 sqm and
4,767 sqm built-up area respectively. As per clause 6.2 (iii) and 6.3 (iii), the
revenue generated from sale of construction lying in Master Escrow account
was to be distributed every year between owners and developers.
Accordingly, the consideration amount was to be worked at ` 14.17 crore on
which SD at the rate of four per cent amounting to ` 56.67 lakh was leviable.
However, the department levied SD of ` 41.76 lakh which resulted in short
levy of SD by ` 14.91 lakh.

51
00.46.50 ha i.e. 4650 sqm of survey No. 58, hissa No. 2; 00.18.10 ha i.e. 1,810 sqm of
survey No. 58, hissa No. 1/A; 00.24.80 ha i.e. 2,480 sqm of survey No. 79, hissa No. 1;
00.6.80 ha i.e. 680 sqm of survey No. 79, hissa No. 2; 00.28.00 ha i.e. 2,800 sqm of
survey No. 81, hissa No. 1/C; 00.04.40 ha i.e. 440 sqm of survey No. 59, hissa No. 6;
00.01.00 ha i.e. 100 sqm of survey No. 59, hissa No. 5 of First Schedule and 00.30.90 ha
i.e. 3,090 sqm at survey No. 1. hissa No. 1; 00.09.60 ha i.e. 960 sqm at survey No. 1.
hissa No. 2; 00.27.60 ha i.e. 2,760 sqm at survey No. 56. hissa No. 2 of Second Schedule
(total 19,770 sqm)

113
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

The office of the IGR accepted (July 2019) the audit observation.
6.5.2.7 As per Para 4 (f) and 4 (g) of the notification (July 2013) of the
Revenue and Forest Department (R&FD), Mumbai, the holder of the simple
receipt shall get it defaced from the registering officer with whom the
instrument is to be registered or from the office of the collector of stamps if
related with the payment of SD in accordance with relevant section of the said
Act, within six months from the date of purchase of stamps and no receipt
shall be treated, as valid unless it is defaced by the registering officer or any
other officer authorized to do so within a period of six months from the date of
purchase of stamps.
Scrutiny of records at the office of the Joint SR, Haveli-XVIII, district Pune
revealed (December 2016) that a development agreement (document No.
3378/2015) was executed (April 2015) between owners and developer for
development of land admeasuring 7,900 sqm52 situated at mouza Charoholi
Budruk, tahsil Haveli, district Pune within the limit of Pimpri Chinchwad
municipal corporation for a consideration of ` 5.29 crore. The department
worked out the market value of the property at ` 4.63 crore and levied SD of
` 31.08 lakh. The department acknowledged the payment of SD of
` 31.08 lakh by defacing the e-payment challan53 of July 2014. However, no
other document in support of payment of SD of ` 31.08 lakh was produced by
the department.
As per clause 29 (A) of document, owner was entitled for 42,250 sqft
constructed area and cash consideration of ` 50 lakh. In addition, developer
had also given refundable security deposit of ` 79 lakh to owner. Accordingly,
the developer's and owner’s share was to be worked out at ` 3.76 crore and
` 9.4554 crore respectively and SD on owner’s share at the rate of five per cent
amounting to ` 47.27 lakh was leviable. However, the department levied SD
of ` 31.08 lakh and defaced e-payment which was made prior to more than
six months. This resulted in short levy of SD by ` 47.27 lakh.
The office of the Joint District Registrar, Pune city accepted (December 2017)
that the validity of the e-challan is only for six months. Thus, payment of
` 31.08 lakh was not admissible and accepted short levy of SD of
` 47.27 lakh.
6.5.2.8 Scrutiny of records at the office of the Joint SR-XXIV, Haveli,
district Pune revealed (July 2018) that a development agreement (document
No. 9978/2017) was executed (November 2017) between owners, consenting
party55 and promoter (developer) for development of land admeasuring
6,900 sqm situated in survey No. 126, Hissa No. 2 at village Dehu, tahsil
Haveli and within the limit of panchayat samiti, Haveli and zilla parishad,
Pune. The department worked out the valuation of the land at ` 5.36 crore and

52
900 sqm at survey No. 247/1 + 7,000 sqm of survey No. 247/3
53
MH 001632746201415E dated 05 July 2014 for ` 31,08,200
54
` 9,45,44,760
55
A development agreement was already executed in March 2014 between the owners and
consenting party for development of the said land. Now, the consenting party and owners
agreed to assign the development rights of the said land to the promoter in this instant
development agreement

114
 Chapter VI - Stamp Duty and Registration Fee

owner’s consideration was worked out at ` 1.11 crore. The SD of ` 26.79 lakh
was levied at the rate of five per cent on the valuation of land being higher
than the owner’s consideration.
As per conditions 2.1, 2.2 and 2.3, the promoter agreed to give ` 1.11 crore as
consideration to the consenting party in addition to 1,142 sq.ft carpet area
(i.e. 127.36 sqm built up area), 11,140 sqft (i.e. 1,035.32 sqm) amnesty space
and interest free refundable deposit of ` 59 lakh. Similarly, the promoter also
agreed to give constructed area of 29,150 sqft (i.e. 2,709.10 sqm built up area)
to the owners. Thus, the share of owners and the consenting party calculated
by Audit was ` 7.45 crore and developer's share was ` 1.59 crore. Therefore,
SD at the rate of five per cent on the value of owners and the consenting party
amounting to ` 37.26 lakh was required to be levied. However, department
levied SD ` 26.79 lakh which resulted in short levy of SD of ` 10.47 lakh.
After being pointed out by Audit (July 2018), the office of the Joint SR stated
that calculation was correct and there was no need for recovery. Further, it
was stated that compliance would be submitted after obtaining comments from
higher authority.
6.6 Short levy of stamp duty in conveyance deed due to incorrect
application of provisions of MS Act and ASR
MS Act envisaged that the consideration for the purpose of levy of SD and RF
on an instrument brought for registration shall be the amount mentioned in the
instrument or the market value of the property determined in accordance with
the instructions and rates contained in the ASR prescribed for that year
whichever is higher.
Audit observed short levy of SD amounting to ` 2.36 crore in six cases
(in four units) due to incorrect application of provisions of MS Act and
instructions to ASR as elaborated below:
6.6.1 As per provision 26 (c) of ASR 2015, if the land purchased by
company/society for agriculture/vegetable/floriculture/rubber plantation/teak
plantation/ orchard farming etc. on commercial basis is situated in the
non-agriculture/probable non-agricultural/residential/developable zone within
the limits of urban and influence areas, it should be valued at the rate
applicable to the concerned valuation zone.
Scrutiny of records at the office of the Joint SR-I, Jalgaon, district Jalgaon
revealed (February 2018) that an indenture of conveyance (document No.
2356/2016) was executed (March 2016) between vendor and purchaser for
sale of land admeasuring 3.78 ha (i.e. 37,800 sqm) together with the structure
standing thereon viz. houses, outhouses, fencing, compound walls, edifices,
buildings, court yards, sewers, drains, ditches, ways, path etc. situated at gat
No. 162/2 at village Shirsoli Pro. BO (influence area), tahsil and district
Jalgaon for a consideration of ` Nil. The department worked out the market
value of the property of ` 1.62 crore and levied SD of ` 8.12 lakh.
Similarly, another indenture of conveyance (document No. 2358/2016) was
executed (March 2016) between vendor and purchaser for sale of land
admeasuring 3.78 ha (i.e. 37,800 sqm) together with the structure standing
thereon viz. houses, outhouses, fencing, compound walls, office, building

115
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

court yard, sewer, drains, ditches, ways, path etc. situated at gat No. 162/1 at
village Shirsoli Pro. BO (influence area), tahsil Jalgaon, district Jalgaon for a
consideration of ` Nil. The department worked out the market value of the
property of ` 1.62 crore and levied SD of ` 8.12 lakh. The basis of calculation
of market value of property by department in both the cases was not available
on record.
As per ready reckoner 2015-16, the gat No. 162/1 & 162/2 of village
panchayat Shirsoli Pra. Bo., tahsil & district Jalgaon is categorized in zone 9.1
as non-agriculture land and the rate of ` 890 per sqm was prescribed for
valuation. Accordingly, the market value was to be worked out to ` 3.36 crore
on which SD at the rate of five per cent amounting to ` 16.82 lakh was
leviable in each case. This resulted in short levy of SD by ` 17.41 lakh.
The office of the IGR stated (November 2019) that during spot verification by
the office of the Collector of Stamps it was noticed that the property is situated
in guava orchard and further stated that the entry in the 7/12 form also showed
property as agriculture land.
The reply is not acceptable because as per recital of the document, the
property was described as the piece or parcel of land or ground with
messuages herediatments and premises situated at gat No. 162/2, area
admeasuring cultivable 3.68 ha + non-cultivable 0.10 ha, total admeasuring
3.78 ha and more particularly described in the schedule and together with all
and singular structures, houses, outhouses, fencing, compound walls, edifices,
buildings, court yards, areas, compounds, sewers, drains, ditches, fences, tress,
plants, shrubs, ways, paths, pages, commons, gullies, wells, waters, water-
course lights. Accordingly, Audit calculated the short levy of SD by
` 17.41 lakh.
Audit requested (February 2020) to the office of the IGR to submit the spot
verification report of Collector of Stamps, Jalgaon alongwith 7/12 extract of
the said piece of land. The same was not supplied.
6.6.2 Instruction No. 24 of ASR 2016-17 envisages that where any
agricultural land in the rural areas and influence areas is purchased for
farm house/forest house, the said user should be treated as the probable non-
agricultural user and the said land should be valued on the basis of the
probable non-agricultural rate worked out in accordance with the instruction
No. 16 (a) of guidelines.
Scrutiny of records at the office of the Joint SR (North)-III, Solapur, district
Solapur revealed (June 2018) that a sale deed (document No. 1423/2016) was
executed (May 2016) between seller and purchaser for a land admeasuring 12
ha 39 R (i.e. 1,23,900 sqm) of tahsil Solapur at village Shivaji Nagar bearing
gat No. 28 within the limits of Solapur municipal corporation for a
consideration of ` 3.20 crore. The department worked out the market value of
the property at ` 3.08 crore and levied SD of ` 19.20 lakh. The department
valued land on 50 per cent rate of open land by applying instruction No. 24 of
ASR 2016-17.
However, the instruction No. 24 is applicable for areas where any agricultural
land in the rural areas and influence areas is purchased for the
farm house/forest house. As the said land is situated within the limits of

116
 Chapter VI - Stamp Duty and Registration Fee

municipal corporation, the valuation of land by applying instruction No. 24

was incorrect. Accordingly, the market value of the property was to be
worked out to ` 6.40 crore on which SD at the rate of six per cent amounting
to ` 38.40 lakh was leviable. However, department levied SD of ` 19.20 lakh
which resulted in short levy of SD by ` 19.20 lakh.
The office of the IGR accepted (June 2019) the audit observation.
6.6.3 As per instruction 16 (a) of ASR 2015-16, in case of land whose
rate is given in both per square meter and per hectare, valuation of property up
to 2,000 sqm is to be carried out as per rate applicable for per square meter
and remaining area to be valued at hectare rate.
Scrutiny of records at the office of the Joint SR, Haveli-XXVI, district Pune
revealed (December 2017) that an agreement (document No. 2947/2016) for
assignment was executed (March 2016) between assignor and assignee for a
land admeasuring 15.13 ha56 (1,51,300 sqm) situated at Charholi Budruk
within the limits of Pimpri Chinchwad municipal corporation (PCMC) for a
consideration of ` 8.36 crore. The department worked out the market value of
the property at ` 9.12 crore and levied SD of ` 54.69 lakh. The basis for
calculation of market value of property by the department was not found on
record.
The above land is situated in two different zones (i.e. zone No. 23/4 and
23/4.1) of PCMC and both rates (i.e. per sqm and per ha) for same land are
prescribed in the ASR 2015-16. Hence, the valuation of land should have been
worked out as per instruction No.16 (a) of ASR 2015-16. The rate prescribed
in the ASR 2015-16 for the above survey numbers was ` 2,480 per sqm and
` 1,03,95,000 per ha. By applying instruction No. 16 (a) of ASR 2015-16, the
market value was to be worked out at ` 16.02 crore on which SD at the rate of
six per cent amounting to ` 96.09 lakh was leviable. However, department
levied SD of ` 54.69 lakh which resulted in short levy of SD ` 41.40 lakh.
The office of the IGR accepted (September 2019) the audit observation.
6.6.4 As per provision 16 (c) of ASR 2016-17, where only one or more
plots under the sanctioned layout excluding the roads, open spaces, amenity
area etc. are sold, the non-agricultural rate should directly be taken into
consideration for the valuation of such areas/consolidated areas.
Scrutiny of records at the office of the Joint SR-XXIII, tahsil Haveli, district
Pune revealed (March 2018) that a sale deed (document No. 9531/2016) was
executed (November 2016) between vendors (owners) and purchaser for a
land admeasuring 2,407 sqm along with the permissible FSI 10,824 sqm of
sanctioned layout of land bearing survey No. 15/2A1 (15/2 +15/3/1 + 15/3/2 +
15/4 +15/5 + 15/6) situated at village Balewadi within the limits of Pune
municipal corporation for a consideration of ` 16.86 lakh. The department
worked out market value of the property at ` 5.73 crore and levied SD of
` 35.09 lakh. The basis of calculation of market value of property by the
department was not available on record.

56
Land admeasuring 7.75 ha (77,500 sqm) bearing survey No. 90 and 7.38 ha (73,800 sqm)
bearing survey No. 91

117
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

As per schedule-III of document, the vendor had permitted to utilize

2,407 sqm along with the additional area of FSI on the land admeasuring
10,824 sqm to the purchaser which was not taken into consideration by the
department while determining the market value of property. The market value
of the property by applying non-agricultural rate was to be worked out at
` 31.49 crore on which SD at the rate of six per cent amounting to ` 1.89 crore
was leviable. This resulted in short levy of SD by ` 1.54 crore.
The office of the IGR accepted (October 2019) the audit observation.
6.6.5 On a conveyance deed, SD is leviable under clauses (a), (b), (c) as
the case may be, of Article 25 of schedule-1 of MS Act, on the market value of
the property or consideration, whichever is higher, which is the subject matter
of transfer. Further, guidelines 16 (a) to the ASR prescribe that the valuation
of the land should be done as per the slabs mentioned therein.
Scrutiny of records at the office of the Joint SR North Solapur-III, district
Solapur revealed (June 2018) that a sale deed (document No. 1781/2017) was
executed (June 2017) between vendors (owners) and purchaser for a land
admeasuring 1.62 ha i.e. 16,200 sqm situated at new survey No. 169/2/2
(old survey No. 178) at village Kasbe Solapur, tahsil North Solapur, district
Solapur within the limits of Solapur municipal corporation for a consideration
of ` 2.51 crore. The department calculated the market value of the property at
` 2.51 crore considering rate of ` 2,470 per sqm applicable to survey No. 178
and levied SD of ` 15.06 lakh.
The scrutiny of instrument revealed that the said property lies in zone
No. 34/125 having survey No. 169/2/2 (new) and as per ready reckoner for the
year 2017-18, the rate prescribed for open land was ` 3,430 per sqm.
Accordingly, the market value of property was required to be worked out to
` 3.32 crore on which SD at the rate of six per cent amounting to ` 19.92 lakh
was leviable. However, department levied SD of ` 15.06 lakh which resulted
in short levy of SD by ` 4.86 lakh.
The office of the Joint SR stated that compliance would be submitted after
discussion with JDR office, Solapur.
6.7 Short levy of stamp duty in cases of lease deed
As per Article 36 (A) (b), if leave and license agreement purports to be for a
period exceeding sixty months with or without renewal clause, the duty is
leviable on lease under clauses (ii) (iii) or (iv) as the case may be of
Article 36. As per Article 36 (iii) and (iv) of the MS Act, in case of lease
where period of lease is up to 10 years with a renewal clause contingent or
otherwise, SD is leviable on 25 per cent of market value of the property, if
lease is for period exceeding ten years and up to 29 years then SD is leviable
on 50 per cent of market value of the property and in case where lease period
exceeds 29 years, the SD is leviable on 90 per cent of market value of the
property. Further, as per explanation-II, the renewal period, if specifically
mentioned, shall be treated as part of the present lease. Instruction number
16 (b) of ASR prescribes the slabs for the valuation of open land.
Audit observed short levy of SD amounting to ` 44.43 lakh due to
non-consideration of renewal clause in one case (in one unit) and of

118
 Chapter VI - Stamp Duty and Registration Fee

` 1.03 crore due to undervaluation of market value in two cases (in two units)
as detailed below:-
6.7.1 Instruction 7 (c) of ASR 2015-16 provides the basis for valuation of
Information Technology (IT)/Information Technology Enabled Services
(ITES) premises in IT park at industrial rate of that zone. In the absence of
industrial rates, unit should be valued at 110 per cent of the rate applicable for
residential units.
A leave and license agreement57 (document No. 4563/2015) was executed
(July 2015) between licensor and licensee of premises admeasuring
8,262.08 sqm58 of the building No. 8 in commercial zone in IT park bearing
survey No. 144/145 situated at Yerwada, tahsil Haveli, district Pune, within
limits of Pune municipal corporation for license period of seven years without
mentioning the amount of consideration. The department worked out market
value of property at ` 45.62 crore on which SD amounting to ` 92 lakh was
levied.
Scrutiny of documents/instruments at the office of Joint SR-XII, Haveli, Pune
revealed (January 2017) that as per the clause 2.1 of document, the initial
period of license was seven years and clause 2.3 provided an option for further
renewal of license for additional period of four years. As such, the department
should have considered 50 per cent of market value (` 27.29 crore59) of
property for levy of SD. Thus, incorrect calculation of market value of the
property resulted in short levy of SD of ` 44.43 lakh60.
The office of the IGR accepted the audit observations and stated (July 2019)
that an amount of ` 43.98 lakh was recovered (June 2019).
6.7.2 As per instruction No. 7 (d) of ASR, a school and religious building
should be valued at the rate assigned to residential flat in the valuation zone
concerned.
Scrutiny of document at the office of Joint SR-IX, Thane revealed
(January 2018) that, a lease deed (document No. 1391/2017) was executed
(March 2017) between lessee and lessor for lease of premises consisting of
ground plus four upper floors admeasuring 26,000 sqft (i.e. 2,416.35 sqm)
bearing survey No. 47/1,6,8 & 9,48/1 B (Part), 1 C, 1 D & 1 E, situated near
Highland Gardens, village Dhokali, Thane (West), tahsil and district Thane,
within the limits of Thane municipal corporation for the period of 28 years for
a consideration of ` 1.10 crore. The department worked out the market value
of the property at ` 6.60 crore and levied SD of ` 33.01 lakh61.

57
A leave and license agreement is an agreement wherein the licensor temporarily allows the
licensee to use and occupy licensor’s immovable property full or a portion of it, for the
purpose of carrying business activity or residential use
58
Units No. 301 admeasuring 4,526.02 sqm on third floor and unit No. 401 admeasuring
3,736.06 sqm on fourth floor
59
Market value of property of unit No. 301 - ` 28.92 crore + Market value of property of unit
No. 401 – ` 23.87 lakh + parking – ` 1.78 crore)
(SD leviable = ` 1.36 crore) – (SD levied = ` 92 lakh)
60

61
five per cent of (50 per cent X ` 6.60 crore)

119
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

As per instruction 7 (d) of ASR, 2016-17, the valuation of property should be

` 25.13 crore on which SD of ` 62.23 lakh62 was leviable. Thus, under
valuation of property resulted in short levy of SD by ` 29.81 lakh.
The office of the IGR accepted (May 2019) the audit observation and stated
that the recovery was in progress.
6.7.3 As per instruction No. 7 (d) of ASR 2016-17, a school and religious
building should be valued at the rate assigned to residential building in the
valuation zone concerned of the ASR.
Scrutiny of records at the office of the Joint SR-IX, Thane revealed
(January 2018) that a lease deed (document No. 1389/2017) was executed
(March 2017) between lessee and lessor for lease of premises consisting of
ground plus two upper floors admeasuring 30,000 sqft (i.e. 2,788.10 sqm)
situated at survey No. 47/1,6,8 and 9, 48/1 B (Part), 1 C, 1 D & I E, near
Highland Gardens, village Dhokali, Thane (West), tahsil and district Thane
within the limits of Thane municipal corporation for the lease period from
01.04.2017 to 31.03.2047 (i.e. 30 years). The department worked out the
market value of the property ` 11.40 crore and levied SD of ` 57.01 lakh. The
details of calculation of market value of the property determined by the
department were not found on record.
As per ASR 2016-17, the property was classified under zone 8/33/3, wherein
the rate for open land was ` 43,800 per sqm and residential building was
` 1.04 lakh per sqm. Accordingly, the correct market value in accordance with
instruction No. 7 (d) of ASR 2016-17 was to be worked out to ` 28.99 crore.
Therefore, the SD required to be levied was ` 1.30 crore63. This resulted in
short levy of SD of ` 73.47 lakh64.
The office of the IGR accepted (November 2019) the observation partly to the
extent of short levy of SD by ` 57.01 lakh only and stated that the land is
situated at vibhag number 8/34-3 ई and rate of residential building is ` 87,900
per sqm.
The reply is not acceptable as the said land is located in survey number 47 and
vibhag number 8/33/3 as per office of the Town Planner, Thane. The rate of
residential building is ` 1.04 lakh sqm as per ASR. Thus, short levy of SD of
` 73.47 lakh was correctly pointed out by Audit.
6.8 Short levy of stamp duty due to non-impounding of instrument
As per section 33 of MS Act, every person having by law or consent of parties
authority to receive evidence and every person in charge of a public office
before whom an instrument chargeable is produced or comes in the
performance of his functions shall, if it appears to him that such instrument is
not duly stamped, impound the same and the executants have no right to seek
for return of document unless the SD is paid. As per section 34 of the MS Act,
no instrument chargeable with duty shall be admitted in evidence for any
purpose by any person unless such instrument is duly stamped with penalty at

62
five per cent of (50 per cent X ` 25.13 crore)
63
five per cent of (90 per cent X ` 28.99 lakh)
64
(Stamp duty leviable - ` 1.30 crore ) – (Stamp duty levied - ` 57 lakh)

120
 Chapter VI - Stamp Duty and Registration Fee

the rate of two per cent of the deficient portion of the SD for every month or
part thereof from the date of execution of such instrument provided that in no
case the amount of the penalty shall exceed four times the deficient portion of
the SD.
Audit scrutiny revealed short levy SD of ` 2.10 crore due to non-impounding
of the instruments in test checked two cases as under:
6.8.1 Section 685 of Maharashtra Registration Manual Part-II stipulates
that City and Industrial Development Corporation (CIDCO) is giving plots for
development on long term lease and the possession of the property handed
over to the builder as licensee and not lessee therefore the documents of
transfer of property on long term lease to CIDCO is to be covered under
Article 5 (g-a). Prior to June 2008, the SD leviable on development agreement
was one per cent on the market value of the property or the consideration,
whichever is higher.
Scrutiny of sale deed (document No. 3827/2014) at the office of
Joint SR-VIII, Koparkhaine, district Thane revealed (January 2016) that an
unregistered document i.e. agreement to lease which was a part and parcel of
above sale deed was executed (January 1992) between a licencee and CIDCO.
An area admeasuring 1,00,021.60 sqm situated at plot No. 24, sector 27, Nerul
in Navi Mumbai was given on lease to Air India for a term of 60 years with
premium of ` 7.50 crore. The lease period was extended to 90 years
(August 1992) on payment of additional premium of ` 5.09 crore. The said
unregistered document (agreement to lease) was required to be impounded by
the SR and recovery of unpaid amount of SD along with interest thereon on
the total premium of ` 12.59 crore paid by Air India for lease was to be
effected at the time of registration of sale deed. The non-impounding of
unregistered document (agreement to lease) resulted in loss of ` 62.98 lakh65
towards SD and penalty.
The office of the IGR accepted (June 2019) the audit observation.
6.8.2 As per Article 16 of Schedule-I of MS Act, in case of instrument
relating to certificate of sale granted to the purchaser of any property sold by
public auction by a Civil or Revenue Court or Collector or other revenue
officer or any other officer empowered by law to sell property by public
auction, SD as is leviable on a conveyance under clause (a), (b), or (c) as the
case may be, of Article 25 shall be charged on the market value of the property
or consideration, whichever is higher, which is the subject matter of transfer.
As per Article 25 (a) if conveyance is related to movable property then SD
leviable is three per cent of the market value of the property.
Scrutiny of records (adjudication case No. 18/2014) at the office of the Joint
District Registrar and Collector of Stamps, Jalna (JDR) revealed (April 2017)
that an unregistered instrument of sale certificate was executed
(February 2013) by the officer authorized under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security and Interest

65
(SD leviable – ` 12.60 lakh) + (penalty – ` 50.38 lakh)

121
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

Act, 2002 for sale of movable properties66 in favour of purchaser for a

consideration of ` 19.72 crore. The movable properties were
secured/mortgaged in favour of the bank67 by mortgagee towards financial
facility totaling to ` 253.68 crore given by the bank to the mortgagee. As per
part III of the bid document, the authorised officer had taken possession of the
movable and immovable properties of the mortgagee in 2010.
The aforesaid sale certificate of movable properties was enclosed with the case
file of sale certificate for immovable properties which was adjudicated
(April 2014) by the office of the JDR. However, the sale certificate was not
registered and no duty was paid thereon. Hence, in view of sections 33 and 34
of the MS Act, the instrument (sale certificate) was required to be impounded
for levy of SD along with penalty thereon. As per sale certificate, the
consideration amount was ` 19.72 crore. Thus, SD of ` 1.47 crore68 was
leviable. This resulted in short levy of SD due to non-impounding of
unregistered instrument.
The office of the JDR confirmed the fact that the instrument was not presented
for adjudication but it was found attached with the other adjudicated
instrument (adjudication No. 18/2014) and stated that further action would be
taken for recovery.
The office of the IGR stated (February 2020) that action under section 33 A
was in progress.

6.9 Short levy of stamp duty due to non-consideration of distinct

matters in one instrument and non-application of instructions to
ASR
As per section 5 of MS Act, any instrument comprising or relating to several
distinct matters shall be chargeable with the aggregate amount of the duties
with which separate instruments, each comprising or relating to one of such
matters, would be chargeable under MS Act. Further, instruction No. 16 (b) of
ASR prescribes a method of calculation of valuation of property.
Audit observed short levy of SD amounting to ` 1.90 crore in four cases
(in two units) due to non-consideration of distinct matters in one instrument
and also non-application of ASR instructions for the valuation of property as
elaborated below:
6.9.1 During scrutiny at the office of the Joint SR-IV Vasai, Audit
observed that three69 development agreements were executed (August 2015
and September 2015) between three sub-developers, owner and developer for
development of land admeasuring 2-07-4 ha (i.e. 20,740 sqm) bearing survey

66
Cane milling plant; milling plant; clarification plant; evaporation and boiling plant;
cooling, curing & grading plant; steam generating plant; power plant; piping, fitting and
valves; molasses storage tanks; workshop equipments; weighing equipments; vehicles;
lifting equipments; electrical items and scrap material
67
Maharashtra State Co-operative Bank Ltd, Mumbai
68
(Penalty from February 2013 to April 2019 (six years and two months = 72+2=
74 months) = ` 59.16 lakh x 74 months x 2/100 = ` 87.56 lakh) + (SD = three per cent of
` 19.72 crore = ` 59.16 lakh)
69
Document No. 4346/2015, 4440/2015 and 4667/2015

122
 Chapter VI - Stamp Duty and Registration Fee

No./hissa No. 254/13, 254/14 and 254/15 situated at mouza Aachole, tahsil
Vasai within limit of Vasai-Virar municipal corporation.
Scrutiny of development agreement (document No. 4346/2015) revealed
(March 2017) that the above land was purchased (August 2015) by developer
from land owner for a consideration of ` 14.52 crore. Audit worked out the
market value of land as ` 28.29 crore on which SD at the rate of five per cent
amounting to ` 1.42 crore was leviable. Apart from this, in this document, a
development agreement with sub-developer for development of land
admeasuring area of 831.26 sqm for a consideration of ` 1.03 crore was
executed. The market value worked out by the department was ` 85.62 lakh.
By applying instruction No. 16 (b) of ASR, the market value of the property
should have been worked out to ` 1.46 crore on which SD of ` 7.30 lakh was
leviable. However, department levied SD of ` 5.13 lakh which resulted in
short levy of SD by ` 1.44 crore70.
Audit further observed that two more development agreements (document
Nos. 4440/2015 and 4667/2015) were executed by the developer with the
sub-developers for development of land which was purchased vide document
No. 4346/2015 as below:
Second development agreement (document No. 4440/2015) was executed
(August 2015) for development of land admeasuring area of 1,175.34 sqm for
a consideration of ` 1.31 crore. The department worked out the market value
of land as ` 1.21 crore. By applying instruction No. 16 (b) of ASR, market
value of land should have been worked out to ` 2.03 crore on which SD at the
rate of five per cent amounting to ` 10.14 lakh was leviable. However,
department levied SD of ` 6.55 lakh which resulted in short levy of SD by
` 3.58 lakh.
Similarly, third development agreement (document No. 4667/2015) was
executed (September 2015) for development of land admeasuring area of
2,250 sqm for a consideration of ` 2.55 crore. The department worked out the
market value of land as ` 2.32 crore. By applying instruction No. 16 (b) of
ASR, the market value of land should have been worked out to ` 3.75 crore on
which SD at the rate of five per cent amounting to ` 18.76 lakh was leviable.
However, department levied SD of ` 12.75 lakh which resulted in short levy
of SD by ` 6.01 lakh. Hence, there was a total short levy of SD of
` 1.53 crore71 on the above three transactions.
The office of the IGR accepted (June 2019) the short levy of SD of
` 72.59 lakh by applying land rate as ` 10,300 per sqm as against ` 1.53 crore
as pointed out by Audit.
The reply is not acceptable, as the rate of open land prescribed in ASR for the
year 2015-16 for the said survey number is ` 18,300 per sqm. Accordingly,
Audit correctly worked out the short levy of SD of ` 1.53 crore.

70
SD on market value of land - ` 1.42 crore + SD on development - ` 7.30 lakh crore ) –
( SD levied - ` 5.13 lakh)
71
` 1.44 crore + ` 3.58 lakh + ` 6.01 lakh

123
Report No. 2 (Economic and Revenue Sectors) for the year ended 31 March 2019

6.9.2 Scrutiny of records at the office of the Joint SR-VI, Haveli, district
Pune revealed (February 2015) that, a sale deed (document No. 7410/2012)
was executed (July 2012) between vendors, purchaser and consenting party for
land admeasuring 11,600 sqm bearing survey Nos. 13/4 C, 13/4 B, 14 A/1 B,
14 A/1 C situated at village Manjri (Budruk) (influence area), tahsil Haveli,
district Pune for a consideration of ` 1.23 crore. The department had worked
out the market value of the land at ` 2.37 crore and levied SD at the rate of
five per cent amounting to ` 11.85 lakh.
As per the clause 1 of document, land owners sold the land for consideration
of ` 1.23 crore to purchaser and as per the clause 3 of document, the
development rights of the said property were vested with the consenter. The
profit arising from development/sale of construction in future was to be shared
between purchaser and consenter in the ratio of 20:80 (i.e. purchaser shall
retain 20 per cent and consenter shall retain 80 per cent). Thus, two
transactions were effected (i) sale of land and (ii) agreement for development
of land. As per section 5 of MS Act, SD amounting to ` 48.50 lakh72 on these
two transactions was leviable. This resulted in short levy of SD by
` 36.65 lakh73.
The office of the IGR stated (November 2019) that Audit had incorrectly
considered the gross sale proceed of the consenter instead of the purchaser for
levy of SD and accepted the short levy of SD to the tune of ` 7.60 lakh only as
against ` 36.65 lakh.
The reply is not acceptable, as Audit has correctly worked out the short levy of
SD amounting to ` 36.65 lakh considering the purchaser’s consideration of
` 9.16 crore as mentioned in clause 4 (3) of the instrument.

6.10 Short levy of stamp duty due to irregular grant of remission

As per Article 16 of schedule-I of MS Act, in case of instrument relating to
Certificate of Sale granted to the purchaser of any property sold by public
auction by a civil or revenue court, or collector or other revenue officer or any
other officer empowered by law to sell property by public auction, SD as is
leviable on a conveyance under clause (a), (b), or (c) as the case may be, of
Article 25 of MS Act, on the market value of the property or consideration,
whichever is higher, which is the subject matter of transfer.
As per Government Notification (May 2013) of Package Scheme of Incentives
(PSI) 2013, full remission of SD for instruments classified under various
Articles74 of schedule I of the MS Act is provided to new unit(s)/ undertaking
expansion/diversification (including mega and ultra-mega projects during the

72
` 11.84 lakh leviable on sale deed + ` 36.66 lakh leviable on development agreement
73
SD leviable ` 48.50 lakh - SD levied – ` 11.85 lakh
74
Article 6 for instruments of hypothecation, pawn, pledge, deposit of title deeds, Article 25
for conveyance, Article 33 for further charge on mortgaged property, Article 36 for lease
and Article 40 for mortgage deed

124
 Chapter VI - Stamp Duty and Registration Fee

investment period) in Group C, D, D+ tahsils75, no industry districts76 and

naxal affected areas. As per explanation (i) of the said notification, unit means
a unit which is so certified by the implementing agency specified under
PSI 2013 or any other officer in this behalf.
Audit observed short levy of SD amounting to ` 97.52 lakh in one case due to
irregular grant of remission of SD as elaborated below:
In addition to short levy of SD amounting to ` 1.47 crore due to
non-impounding of unregistered instrument77 which was executed in
February 2013 in adjudication case No. 18/2014 as discussed in
paragraph 6.8.2, it was further observed that JDR allowed remission of SD of
` 75.37 lakh on Certificate of Sale of immovable property to a new purchaser
on the basis of eligibility certificate issued in March 2014 by Directorate of
Industries, Government of Maharashtra, Mumbai. However, there was no
provision for remission of SD for Certificate of Sale (covered under Article
16) in the Government Notification of May 201378. Further, Government
Notification (May 2013) was effective from April 2013 and the said
Certificate of Sale for immovable property was executed in February 2013.
Therefore, grant of remission of SD of ` 75.37 lakh was irregular.
As per this Certificate of Sale of immovable property, the receipt of
` 24.38 crore was acknowledged as consideration. Thus, SD at the rate of
four per cent amounting to ` 97.52 lakh was leviable. However, department
levied SD of ` 100 which resulted in short levy of SD of ` 97.52 lakh.
The office of the IGR stated (February 2020) that action under section 53 A
was in progress.
The above observations were referred to the Government between May 2019
and April 2020; replies were awaited (June 2020).

75
(i) Group A comprising the developed areas, viz. Mumbai Metropolitan Region (MMR)
and Pune Metropolitan Region (PMR); (ii) Group B comprising the areas where some
development has taken place; (iii) Group C comprising the areas, which are less developed
than those covered under Group B; (iv) Group D comprising the lesser-developed areas of
the state not covered under Group A/Group B/Group C; (v) Group D+ comprising those
least developed areas not covered under Group A/Group B/Group C/Group D
76
Not covered under Group A/B/C/D & D+
77
Certificate of Sale for movable property
78
also in earlier remission notification (June 2007) under PSI 2007, no provision for
remission of stamp duty for sale certificate (covered under Article 16) was available

125