ANOTHER BAT­TLE ON THE CARDS?

Own­ers cry foul as their ap­pli­ca­tions for regis­tra­tion of apart­ments are put on hold for as­sess­ment of stamp duty – which is likely to be cal­cu­lated as per cur­rent costs

HT Estates - - Front Page - Jee­van Prakash Sharma Are you plan­ning to pur­chase a house this fes­tive sea­son?

There seems to be no end to the woes of apart­ment own­ers in the Com­mon­wealth Games Vil­lage. Af­ter fight­ing a two-year le­gal bat­tle with the Delhi De­vel­op­ment Author­ity (DDA) and de­vel­oper Emaar MGF for pos­ses­sion of the apart­ments, these high-pro­file buy­ers’ next big chal­lenge is to get the ti­tle deed for their homes.

The joy of mov­ing into their homes in the Vil­lage was short-lived when some own­ers were told that their ap­pli­ca­tions for regis­tra­tion of the flats at the of­fice of the sub-reg­is­trar VIII (Geeta Colony in East Delhi) had been put on hold.

“When I ap­plied for regis­tra­tion al­most 25 days ago, I was told that the sub-reg­is­trar would con­sult his se­niors be­fore mov­ing ahead. A de­ci­sion was pend­ing on the money to be charged as stamp duty,” says a flat owner, re­quest­ing anonymity.

Sources in the rev­enue depart­ment con­firm that the sub-reg­is­trar’s of­fice had re­quested the of­fice of the di­vi­sional com­mis­sioner to give its rec­om­men­da­tions on the stamp duty to be charged. “When own­ers paid up 95% of the apart­ment cost in 2008-2009, the mar­ket rate then was R12,000 to R14,000 per square feet, while in May 2012, when the DDA held an auction of about 100 flats, the av­er­age rate was R22,000 to R24000 per sq ft,” says a rev­enue of­fi­cer who does not want to be named.

“So, the cost of an apart­ment, which was bought for R3 crore in 2008, has now ap­pre­ci­ated to al­most R5 crore. If we cal­cu­late 6% stamp duty on the 2008 and 2012 prices, it comes to R18 lakh for R3 crore and R30 lakh for R5 cr. Since the dif­fer­ence is a whop­ping R12 lakh, the sub-reg­is­trar of­fice’s has asked se­nior rev­enue depart­ment of­fi­cials to take a fi­nal call,” the rev­enue of­fi­cer adds.

The CWG flat own­ers and ex­perts on mat­ters of prop­erty regis­tra­tion ar­gue that if the rev­enue depart­ment has al­ready fixed dif­fer­ent cir­cle rates for dif­fer­ent types of prop­er­ties for stamp duty, it can’t em­ploy a pick and choose method for the CWG apart­ments. The rev­enue depart­ment has noth­ing to do with the ac­tual price ap­pre­ci­a­tion in the real es­tate mar­ket, they say.

As per the In­dian Stamp Act, 1899, for reg­is­ter­ing an apart­ment, stamp duty has to be paid on ei­ther the trans­ac­tion cost (the price at which it was bought) or the cur­rent cir­cle rate, which­ever is higher. So, a 2,224 sq ft CWG flat, bought for R3.5 crore will be val­ued at R1.55 cr if the high­est ap­pli­ca­ble cir­cle rate is fac­tored in (for a pri­vate de­vel­oper’s apart­ment in Delhi it could come to about R7009 per sq ft). Here, as the trans­ac­tion cost is higher than the cir­cle rate, the sub- reg­is­trar should ide­ally levy 6% stamp duty on R3.5 crore.

Lawyer San­jeev Gupta, an ex­pert on reg­is­tra­tions, says, “The sub-reg­is­trar has noth­ing to do with the price es­ca­la­tion of an apart­ment. If the flat cost comes out to be more than the cir­cle rate – even by a ru­pee – then stamp duty will be levied on the trans­ac­tion cost. A sub-reg­is­trar can’t cal­cu­late stamp duty on R6crore just be­cause the mar­ket prices have es­ca­lated from the ini­tial costs of R3.5 cr.”

The Vil­lage Buy­ers Wel­fare As­so­ci­a­tion (VBWA) has de­cided to op­pose any “un­fair” move. Anoop Sharma, presid­net, VBWA says, “In all fair­ness and to bring jus­tice to the help­less cit­i­zens who have been suf­fer­ing for quite some time de­spite hav­ing in­vested in such a pres­ti­gious project, the flats must be reg­is­tered at the pur­chase price at the ear­li­est.”

Sharma is of the opin­ion that be­fore the rev­enue depart­ment adopts a dif­fer­ent yard­stick to as­sess the stamp duty, it must fac­tor in the pay­ments for the apart­ments – which were made be­tween mid- 2008 to late 2009, when the pur­chase price per sq ft was be­tween R12000 to R14000, which ap­pears to be sig­nif­i­cantly higher than the pre­vail­ing cir­cle rates for pri­vate builder flats across Delhi.

“The flat buy­ers were given pos­ses­sion from May 2012 af­ter a de­lay of more than one year – for no fault of theirs and also due to a dis­pute be­tween DDA/Emaar as co-de­vel­op­ers. Thus, the buy­ers have al­ready suf­fered by pay­ing huge EMIs,” Sharma says.

“It’s dif­fi­cult to as­sess the mar­ket rate at the mo­ment for these flats due to con­tin­ued dis­pute on the is­sue of com­ple­tion cer­tifi­cate for tower 5 and 15, low den­sity of oc­cu­pa­tion, and no gas supply to the com­plex etc,” says another CWG flat owner.

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