Brother Given in Adoption Is No Longer a ‘Brother’ for Stamp Duty Gift Exemption: Rajasthan High Court

The donor, respondent No. 4, is a biological son of the petitioner's father but was given in adoption to his uncle, though he kept living in his natural father's house (para 3). By a registered gift deed of 22.03.2016 he gifted part of his share in land to the petitioner, and the Sub-Registrar allowed a 2.5% rebate in stamp duty (para 4). An Accountant General audit objected that a gift to a natural brother did not qualify (para 5). On reference, the Collector (Stamps) assessed a duty difference of Rs. 37,59,100 with 12% interest and an equal penalty on 19.11.2018, and the Sub-Registrar demanded Rs. 45,10,920 (paras 6-7). The petitioner, supported by the donor, challenged both orders (paras 8, 12).

The Court held that the exemption notification of 06.03.2013 uses the word ‘Brother’, which has to be construed by the doctrine of strict interpretation (para 14). It did not adopt the liberal reading of a beneficial notification, covering every kind of brother, that the donor had sought (paras 12, 14). The donor had gone in adoption to his uncle, and Section 12 of the Hindu Adoptions and Maintenance Act, 1956 deems an adopted child to be the child of the adoptive parents for all purposes from the date of adoption; all ties with the family of birth are severed and replaced by those created in the adoptive family (para 15). Stressing the ‘sweeping implication’ of Section 12, the Court held that once the ties with the natural brother stood severed on the date of adoption, the donor could not be called the petitioner's brother for the exemption (para 16). Because the claim pivoted on qualifying as a ‘Brother’ under the notification, the petitioner did not meet the criterion and could not be granted the rebate (para 17). The judgment does not separately address the alternative-remedy objection or the plea against interest and penalty (paras 9-10).