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Lesson 14 explains the **substance over description** rule. Which proposition correctly states the rule for determining stamp duty?
A{'text': 'It is the substance of the transaction as contained in the instrument and not the form of the instrument that determines the stamp duty, though the duty is leviable on the instrument and not on the transaction', 'label': 'A'}
B{'text': 'The form of the instrument as titled at its head is conclusive of the stamp duty payable under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'B'}
C{'text': 'The intention of the parties as expressed orally at the time of execution is conclusive of the stamp duty payable under any provision of any law in force in any State of India regardless of any other consideration of any kind', 'label': 'C'}
D{'text': 'The intention of the legislature expressed by inference is conclusive of the stamp duty payable under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force', 'label': 'D'}
Answer & Solution
Correct answer: A. {'text': 'It is the substance of the transaction as contained in the instrument and not the form of the instrument that determines the stamp duty, though the duty is leviable on the instrument and not on the transaction', 'label': 'A'}
1. Lesson 14 states under "Substance and description": "**Courts have invariably upheld the principle of substance of the transaction, over the form**, in the matter of deciding the nature of the instrument."
2. "It is the substance of the transaction as contained in the instrument and not the form of the instrument, that determines the stamp duty, though the duty is leviable on the instrument and not on the transaction."
3. Where a single instrument contains several purposes, the instrument **as a whole** should be read to find its dominant purpose.
4. The Court must look at the document itself, as it stands, to determine sufficiency of stamping.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 14 (Indian Stamp Act, 1899), pp. 337-353._
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