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1 - 8 of 8 (0.65 seconds)The Companies Act, 1956
Section 27 in The Indian Stamp Act, 1899 [Entire Act]
The Income Tax Act, 1961
Official Liquidator vs Sri Krishna Deo And Ors. on 16 May, 1958
whether by the conveyance deed dated 9.6.1994, the plant and
machinery were also transferred; and if so, whether the
High Court was right in accepting the valuation as made by
the authorities for the purpose of stamp duty payable ?
Considering the question whether the plant & machinery in
the instant case can be construed as immovable property or
not, the High Court came to the conclusion that the
machineries which formed the fertilizer plant, were
permanently embedded in the earth with an intention of
running the fertilizer factory and while embedding these
machineries the intention of the party was not to remove the
same for the purpose of any sale of the same either as a
part of a machinery or scrap and in the very nature of the
user of these machineries, it was necessary that these
machineries be permanently fixed to the ground. Therefore,
it came to the conclusion that these machineries were
immovable property which were permanently attached to the
land in question. While coming to this conclusion the
learned Judge relied upon the observations found in the case
of Reynolds v. Ashby & Son (1904 AC 466) and Official
Liquidator v. Sri Krishna Deo & Ors. (AIR 1959 All. 247).
We are inclined to agree with the above finding of the High
Court that the plant and machinery in the instant case are
immovable properties. The question whether a machinery
which is embedded in the earth is movable property or an
immovable property, depends upon the facts and circumstances
of each case. Primarily, the court will have to take into
consideration the intention of the parties when it decided
to embed the machinery whether such embedment was intended
to be temporary or permanent. A careful perusal of the
agreement of sale and the conveyance deed along with the
attendant circumstances and taking into consideration the
nature of machineries involved clearly shows that the
machineries which have been embedded in the earth to
constitute a fertiliser plant in the instant case, are
definitely embedded permanently with a view to utilise the
same as a fertiliser plant. The description of the machines
as seen in the Schedule attached to the deed of conveyance
also shows without any doubt that they were set up
permanently in the land in question with a view to operate a
fertilizer plant and the same was not embedded to dismantle
and remove the same for the purpose of sale as machinery at
any point of time. The facts as could be found also show
that the purpose for which these machines were embedded was
to use the plant as a factory for the manufacture of
fertiliser at various stages of its production. Hence, the
contention that these machines should be treated as movables
cannot be accepted. Nor can it be said that the plant and
machinery could have been transferred by delivery of
possession on any date prior to the date of conveyance of
the title to the land.
Section 56 in The Indian Stamp Act, 1899 [Entire Act]
Sirpur Paper Mills Ltd vs The Collector Of Central Excise, ... on 11 December, 1997
Mr. Verma, in support of his
contention that the machineries in question are not
immovable properties, relied on a judgment of this Court in
Sirpur Paper Mills Ltd. v. Collector of Central Excise,
Hyderabad (1998 1 SCC 400). In the said case, this Court
while considering the leviability of excise duty on
paper-making machines, based on the facts of that case, came
to the conclusion that the machineries involved in that case
did not constitute immovable property. As stated above,
whether a machinery embedded in the earth can be treated as
movable or immovable property depends upon the facts and
circumstances of each case. The Court considering the said
question will have to take into consideration the intention
of the parties which embedded the machinery and also the
intention of the parties who intend alienating those
machinery. In the case cited by Mr. Verma, this Court in
para 4 of the judgment had observed thus : In view of this
finding of fact, it is not possible to hold that the
machinery assembled and erected by the appellant at its
factory site was immovable property as something attached to
earth like a building or a tree. The Tribunal has pointed
out that it was for the operational efficiency of the
machine that it was attached to earth. If the appellant
wanted to sell the paper-making machine it could always
remove it from its base and sell it." From the above
observations, it is clear that this Court has decided the
issue in that case based on the facts and circumstances
pertaining to that case hence the same will not help the
appellant in supporting its contention in this case where
after perusing the documetns and other attending
circumstances available in this case, we have come to the
conclusion that the plant and machinery in this case cannot
but be described as an immovable property. Hence, we agree
with the High Court on this point. The next question for
consideration is whether the vendor did transfer the title
of the plant and machinery in the instant case by the
conveyance deed dated 9.6.1994. Here again, it is
imperative to ascertain the intention of the parties from
the material available on record. While ascertaining the
intention of the parties, we cannot preclude the contents of
the agreement pursuant to which the conveyance deed in
question has come into existence. We have noticed that as
per the agreement it is clear what was agreed to be sold is
the entire business of fertilizer on an as is where is
basis including the land, building thereon, plant and
machinery relating to fertilizer business description of
which is found in the definition of the term fertilizer
business in the agreement itself which has been extracted
by us hereinabove. It is not the case of the appellant when
it contends that the possession of plant and machinery was
handed over separately to the appellant by the vendor that
these machineries were dismantled and given to the
appellant, nor is it possible to visualise from the nature
of the plant that is involved in the instant case that such
a possession de hors the land could be given by the vendor
to the appellant. It is obviously to reduce the market
value of the property the document in question is attempted
to be drafted as a Conveyance Deed regarding the land only.
The appellant had embarked upon a methodology by which it
purported to transfer the possession of the plant and
machinery separately and is contending now that this handing
over possession of the machinery is de hors the conveyance
deed. We are not convinced with this argument. Apart from
the recitals in the agreement of sale, it is clear from the
recitals in the conveyance deed itself that what is conveyed
under the deed dated 9.6.1994 is not only the land but the
entire fertilizer business including plant and machinery. A
perusal of Clauses 10, 11 and 13 of the said deed shows that
it is the fertilizer factory which the vendor had agreed to
transfer along with its business as a going concern and to
complete the same the conveyance deed in question was being
executed. There is implicit reference to the sale of
fertilizer factory as a going concern in the conveyance deed
itself. That apart, the inclusion of Schedule III to the
conveyance deed wherein a Plan delineating the various
machineries comprising of the fertilizer factory is appended
shows that it is the land with standing fertilizer factory
which is being conveyed under the deed, though an attempt to
camouflage this part of the property sold is made in the
recitals, in our opinion, the parties concerned have not
been able to successfully do so. While considering this
question of transfer of plant and machinery being part of
the conveyance deed or not, reliance can also be placed on
the application filed by the appellant before the
appropriate authority of the Income-Tax Department wherein
while disclosing the market value of the immovable property
sought to be transferred the appellant himself has mentioned
the value of the property so transferred as Rs.70 crores
which is the figure found in the agreement of sale which
agreement includes the sale of plant and machinery along
with the land. A certificate issued by the appropriate
authority under Section 269 UL(3) of the Income Tax Act
evidences this fact. In the said application made by the
appellant for obtaining the said certificate, the appellant
has in specific terms at serial No. (iv) of the Schedule
included plant and machinery, railway sliding and other
immovable properties as part of the fertilizer business
undertaking. It is also found on record that by a
supplementary affidavit dated 8.9.1993 filed before the
Income Tax department while filing Form 37-I prescribed
under the Income-tax Rules the petitioner has again shown
all these plant and machinery along with the Plan which is
now attached to the conveyance deed as part of the property
that is being conveyed. Merely because in some of the
relevant paragraphs of the Conveyance Deed the appellant has
tried to highlight the fact that what is being sold under
the conveyance deed is only the land and a reference is made
in regard to the handing over of possession of the machinery
on an earlier date does not ipso facto establish that the
vendor did not convey the title of the plant and machinery
under the conveyance deed dated 9.6.1994.
Himalaya House Co. Ltd. Bombay vs Chief Controlling Revenue Authority on 1 February, 1972
Learned counsel
for the appellant has placed for our consideration a
judgment of this Court in the case of Himalaya House Co.
Ltd., Bombay v. The Chief Controlling Revenue Authority
(1972 1 SCC 726) to contend that a mere reference to an
earlier agreement does not amount to incorporation of the
terms and conditions of an earlier transaction or the
intention of the parties. We have carefully considered the
said judgment and, in our opinion, that judgment does not in
any manner lay down the law in absolute terms that a court
cannot look into prior agreements while considering the
intention of the parties for finding out what actually is
the property that is conveyed under the deed under
consideration. It is again based on facts of that case that
this Court came to the conclusion therein that the so called
terms and conditions which were found in an earlier
agreement were not intended to be incorporated in the
subsequent document. This is clear from the following
observations of this Court appearing in Para 10 of the said
judgment : From the language used in the Assignment
Deed, it is not possible to come to the conclusion that the
terms and conditions of the earlier transaction have been
made a part of that Deed. Further barring one particular
agreement, other agreements were not before the Court.
Therefore, it is not possible to know what the terms and
conditions of those agreements were. Before the terms and
conditions of an agreement can be said to have been
incorporated into another document, the same must clearly
show that the parties thereto intended to incorporate them.
No such intention is available in this case.
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