Stamp duty on transfer of property from parent company to 100% subsidiary company


Will the stamp duty be exempt if a parent company transfers it’s land to a 100% sudsidary company..Both the companies being in UP. What is the status of stamp duty in the above case?If exempt then under what notification
 
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LEGAL

yes you need to pay stamp duty 

 
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LEGAL

 
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My lawyer is telling that the below mentioned rule will apply:-

“Notification no. 1 dated the 16th January, 1937.
No. 1 – In exercise of the powers conferred by clause (a) of section 9 of the Indian Stamp Act, 1899 (II of 1899), the Governor General in Council is
pleased to remit the stamp duty chargeable under articles 23 and 62 of Schedule I to the said Act on instruments evidencing transfer of property
between companies limited by shares as defined in the Indian Companies Act, 1913, in cases –
(i) where at least 90 per cent of the issued share capital of the transferee company is in the beneficial ownership of the transferor company, or,
(ii) where the transfer takes place between a parent company and a subsidiary company one of which is the beneficial owner of not less than 90 per cent of the issued share capital of the other, or
(iii) where the transfer takes place between two subsidiary companies of each of which not less than 90 per cent of the share capital is in the beneficial ownership of a common parent company.
Provided that in each case a certificate is obtained by the parties from the officer appointed in this behalf by the local Government concerned that
the conditions above prescribed are fulfilled.”
This notification was superseded by a subsequent notification bearing no. 13 which is dated 25th of December, 1937. The copy of the notification placed before the court reads as follows :-
“ N o. 1 3. dated the 25 th of December, 1937
In exercise of the powers conferred by clause (a) of section 9 of the Indian Stamp Act, 1899 (II of 1899), and in supersession of all previous notifications issued from time to time under the said clause of the said section in so far as they relate to the Province of Delhi (hereinafter referred to as the said Province) except the notification of the Government of India in the Finance Department (Central Revenue) No. 6 – Stamps, dated the 14th August, 1937, the Central Government is pleased to reduce, to the extent set forth in each case, the duties chargeable in the said Province under the said Act in respect of the instruments hereinafter described under Nos. 4, 15, 30, 39, 40 [43, 49, 56 and 57] and to remit the duties so chargeable in respect of instruments of the other classes hereinafter described:-
xxx xxx

K.OTHER DOCUMENTS
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55. Instrument evidencing transfer of property between companies limited by shares as defined in the Indian Companies Act, 1913, in a case where
(i) at least 90 per cent. F the issues share capital of the transferee company is in the beneficial ownership of the transferor company, or,
(ii) where the transfer takes place between a parent company and a subsidiary company one of which is the beneficial owner of not less than 90 per cent. Of the issued share capital of the other, or (iii) where the transfer takes place between two subsidiary companies of each of which not less than 90 per cent of the share capital is in the beneficial ownership of a common parent company:
Provided that a certificate is obtained by the parties to the instrument from the officer appointed in this behalf by the Chief Commissioner of Delhi that the conditions above prescribed are fulfilled.”
The Delhi High Court held as under: 16. Finding
16.1. The objections raised by learned counsel for the respondent to the applicability of the notification are therefore legally untenable and cannot be sustained.
16.2 It is held that the notification dated 25th of December, 1937 is applicable and binding.

Please clarify


 

 
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