JUDGMENT Hon’ble Vikram Nath, J.—The petitioner purchased House No. 385/266, Mohalla Bahadurganj, Allahabad, standing over a total area of 84.02 square metres vide registered sale deed dated 8.2.1999. The covered area of the building was only 35 square metres and the remaining was open land. It is also averred in the sale deed that the constructions are more than 100 years old and are in dilapidated condition. The petitioner applying the; circle rate, existing at the relevant time, paid Stamp Duty of Rs. 30,000/- on a total market value of Rs. 3,00,000/-. 2. The matter was referred for determination of market value under Section 47-A of the Indian Stamp Act, 1899. Notices were issued and objections were filed by the petitioner. The Deputy Collector, Sadar, Allahabad vide order dated 26.8.2000 came to the conclusion that since the building in question was situated in a commercial area, therefore, the circle rate applicable for commercial building should be applied and market value should be determined accordingly. According to him for commercial areas, the circle rate was Rs. 60/- per square metre per month as monthly rent and.as per the formula 25 years rental value would determine the value of the building. The Additional Collector applied the said formula over the entire land of 84 square metres and further applying the value of construction at the rate of Rs. 3,200/- per square metre, calculated the value of the constructions and, after summing up both the values, fixed the market value at Rs. 17,82,000/-. On the said value, the Stamp Duty payable would be Rs. 1,78,200/-. He further Imposed penalty at the rate of 2% per month which came to Rs. 56,316/-. As the petitioner had already paid Rs. 30,000/-, the total amount imposed as deficiency and penalty was Rs. 2,04,516/-. 3. Aggrieved by the said order, the petitioner filed a revision before the Commissioner, which has also been dismissed vide order dated 9.4.2001. 4. Aggrieved by these two orders, the present writ petition has been filed. 5. I have heard Shri H.P. Singh, learned Counsel for the petitioner and the learned Standing Counsel for the respondents. 6. This Court vide order dated 10.8.2005 had directed the Collector, Allahabad to submit a report as to whether on the relevant date (i.e. date of the sale deed) the disputed house was within a commercial area. 5. I have heard Shri H.P. Singh, learned Counsel for the petitioner and the learned Standing Counsel for the respondents. 6. This Court vide order dated 10.8.2005 had directed the Collector, Allahabad to submit a report as to whether on the relevant date (i.e. date of the sale deed) the disputed house was within a commercial area. Pursuant to the same, a supplementary affidavit has been filed by the Collector, Allahabad in which some reports have been annexed. But there is no specific averment or any evidence to show that the house in dispute was in a commercial area. 7. Learned Counsel for the petitioner has urged that in the absence of any specific report, based upon the evidence, it should be presumed that the building in question was not situate in any commercial area but was in a residential area and, therefore, the rate, at which Stamp Duty has been paid, was sufficient. 8. It is true that the District Magistrate, Allahabad has not been able to clearly spell out as to whether or not the building in question was in commercial area, but the fact remains that both the Courts below have recorded specific findings that the building in question was situate in Bahadurganj, which, undisputedly, is a commercial area of the City. Therefore, I am not inclined to go into the question as to whether or not the house in question is situate in commercial area and the findings to that effect are not disturbed. 9. The question, which arises for determination is whether the Deputy Collector has correctly applied the formula for calculating the market value. The Deputy Collector, Allahabad has calculated the market value of the house in question firstly on the rental basis i.e. the rent fixed by the Collector and the value of the building would be the rent for 25 years. According to the circle rate, the rate of rent was Rs. 60/- per square metre per month. Instead of applying the rental to the covered area of the building and thereafter, calculating the value of the remaining open land, the Deputy Collector, Allahabad has applied it to the whole area, which according to me, is not correct. According to the circle rate, the rate of rent was Rs. 60/- per square metre per month. Instead of applying the rental to the covered area of the building and thereafter, calculating the value of the remaining open land, the Deputy Collector, Allahabad has applied it to the whole area, which according to me, is not correct. Even otherwise, admittedly, at the time of the sale deed, the building was in the shape of residential house and was not being used for commercial purposes, therefore, also the entire area of the land could not be calculated on the said rental value. In my opinion, only the covered area could be calculated at the rental value which would come to 60x12x25x35= Rs. 6,30,000/-. Since the rental method of calculating the market value includes the value of the construction as well as the land underneath, therefore, what remains to be calculated is the remaining area of the land, which is 49.02 square metres. The value of the said land at the rate of Rs. 1,500/- per square metres comes to Rs. 73,530/-. Thus, the total value of the land and building would come to Rs. 7,03,530/-. Thus, the petitioner would be liable to pay Stamp Duty on the said amount, which will come to Rs. 70,400/- upon rounding up the value of the land and the building, the petitioner has already deposited Rs. 30,000/-. The remaining value to be deposited is Rs. 40,400/-. 10. Pursuant to the interim order dated 20.4.2001, the petitioner has deposited Rs. 1,02,258/- only being half of the amount demanded under the impugned order dated 26.8.2000. 11. Considering the facts and circumstances of the case, I am, not inclined to impose penalty at the rate of Rs. 2% per month as it would be too excessive and arbitrary and also, therefore, considering the nature of the building and amount of Stamp Duty already paid, it does not appear to be a case of total evasion of stamp duty. Therefore, it would be appropriate if Rs. 11,858/- is imposed as penalty and adjusted against the deposit already made and the balance amount of Rs. 50,000/- is refunded to the petitioner. 12. In the facts and circumstances of the case, the writ petition is allowed. The impugned orders are quashed and the total amount due from the petitioner would come to Rs. 70,400/- as deficiency and Rs. 11,858/- as penalty. 50,000/- is refunded to the petitioner. 12. In the facts and circumstances of the case, the writ petition is allowed. The impugned orders are quashed and the total amount due from the petitioner would come to Rs. 70,400/- as deficiency and Rs. 11,858/- as penalty. Since the petitioner has already paid Rs. 30,000/- at the time of execution and has deposited Rs. 1,02,258/- under interim orders of this Court, therefore, the remaining amount of Rs.50,000/-, which is lying in surplus with the Deputy Collector, Sadar, Allahabad, will be refunded to the petitioner within a period of one month from the date of production of certified copy of this order. Petition Allowed. ———