JUDGMENT : 1. Heard Sri Mahipal Singh, learned counsel for the petitioner and Sri Awadhesh Kumar, learned Standing Counsel for the State. 2. Present writ petition has been filed against the order of the Commissioner Moradabad Division dated 16.08.2013 passed in Appeal No.35/2012-13 (Baba Associates Vs State) filed under Section-56(1) of the Indian Stamp Act, 1899 (hereinafter referred to as the 'Act'). By that order, the appellate authority has confirmed the deficiency of stamp Rs.1,19,800/-, and imposed an equal amount of penalty on the petitioner, vide order dated 18.10.2012 passed in Stamp Case No.309 of 2012-13 under Section 47A of the Act. 3. It transpires, the petitioner executed the subject sale deed dated 12.04.2012 whereby he disclosed purchase 0.506 hectare of agricultural land in Gata No.247, Village-Alipura, Tehsil-Nazibabad, District-Bijnor. Earlier, the petitioner had purchased certain other portions of that land (in the same Gata), vide the earlier sale deeds dated 17.08.2011 and 27.12.2011. Copies of those deeds have been appended to the rejoinder affidavit. That is the admitted case of the petitioner. In any case, the penalty imposed is wholly unfounded and excessive. 4. After execution of the subject sale deed, the petitioner applied for declaration under Section-143 of the Uttar Pradesh Zamindari Abolition & Land Reforms Act, 1952 (hereinafter referred to as the 'Reforms Act') to declare non agricultural, the land purchased by him vide subject sale deed. Soon thereafter, on 11.06.2012, the ADM conducted a spot inspection of the land in question and submitted his report calling upon the stamp collector to make a reference re under valuation of the subject deed. Also admittedly, on 26.06.2012, the land in question was declared 'abadi'. On 06.07.2012, permission was granted to the petitioner to develop a residential colony. 5. In that background on 24.07.2012, a notice was issued under Section 33/47A to the petitioner, proposing to value the subject deed at Rs.80,96,000/-against disclosed valuation Rs.56,93,000/-. Accordingly against disclosed stamp duty payment Rs.2,85,000/-, deficient stamp duty Rs.1,19,800/-was proposed to be assessed. 6. In the proceedings, the revenue authorities relied on the report of the ADM with respect to spot inspection dated 11.06.2012 wherein it was found construction activities were being carried out over the land in question. Further, it has noted in the order of the appellate authority, plotting work was also being carried out. 7. 6. In the proceedings, the revenue authorities relied on the report of the ADM with respect to spot inspection dated 11.06.2012 wherein it was found construction activities were being carried out over the land in question. Further, it has noted in the order of the appellate authority, plotting work was also being carried out. 7. On the other hand, learned counsel for the petitioner would submit, in the spot inspection report, it was found, the land was lying vacant and the plotting work that had been referred to was on the land earlier purchased by the petitioner i.e. in the year 2011 (referred to above by way of averments of the rejoinder affidavit). Further reference has been made to the 'Khatauni' to submit that Gata No.247 is a very large plot. On a small portion thereof abadi existed. On the remaining plot, agricultural activities was being carried out. Strong emphasis has been laid to the ground of appeal wherein the report submitted by the ADM was doubted. Thus, it has also been submitted, a fresh inspection ought to have been conducted during the appeal proceedings. Last, it has been suggested, even today no residential colony has come up. 8. On the other hand, learned Standing Counsel submits, the 'abadi' was on the larger portion of the same Gata/plot. In any case, in face of admission made by the petitioner that it was plotting the land earlier purchased and the present subject deed being with respect to the same plot of land coupled with the declaration sought under Section 143 of the Reforms Act, immediately upon purchase of the land, there is no error in the order determining stamp deficiency and penalty. 9. Having heard learned counsel for the parties and having perused the record, insofar as, it is not disputed that the petitioner had made purchase of a portion of the same land-part Gata No.247, on different dates and it being further admitted to the petitioner that it had started plotting the land earlier purchased by it in the year 2011, there exists strong evidence of the land being non agricultural. The principle to be applied in such a case has been considered in a three -Judge Special Bench decision of this Court in Smt. Pushpa Sareen Vs. The principle to be applied in such a case has been considered in a three -Judge Special Bench decision of this Court in Smt. Pushpa Sareen Vs. State of U.P., 2015 (3) ADJ 136 , wherein, amongst others, the following question was framed : "(2) Whether the Collector Stamps has power to fix the valuation of a plot on the assumption that the same is likely to be used for commercial purposes, and whether the presumed future prospective use of the land can be a criterion for valuation by the Collector;" 10. Answering the above question, the Special Bench made following pertinent observations : "20. Now insofar as the second question is concerned, the issue posed for consideration before the Court is whether the Collector has the power to fix the valuation of a plot on the assumption that it is likely to be used for commercial purposes and whether the presumed future prospective use of the land can be a criterion for valuation by the Collector. The Collector, while exercising his jurisdiction under Section 47-A, is required to determine the market value of the property on the date of the instrument. It is a well-settled principle of law that stamp duty is a levy which is imposed not on the transaction but on the instrument." 11. Further as to the value on the date of execution of the subject sale deed, the Special Bench expressed its opinion as below : "26. The true test for determination by the Collector is the market value of the property on the date of the instrument because, under the provisions of the Act, every instrument is required to be stamped before or at the time of execution. In making that determination, the Collector has to be mindful of the fact that the market value of the property may vary from location to location and is dependent upon a large number of circumstances having a bearing on the comparative advantages or disadvantages of the land as well as the use to which the land can be put on the date of the execution of the instrument. 27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. 27. Undoubtedly, the Collector is not permitted to launch upon a speculative inquiry about the prospective use to which a land may be put to use at an uncertain future date. The market value of the property has to be determined with reference to the use to which the land is capable reasonably of being put to immediately or in the proximate future. The possibility of the land becoming available in the immediate or near future for better use and enjoyment reflects upon the potentiality of the land. This potential has to be assessed with reference to the date of the execution of the instrument. In other words, the power of the Collector cannot be unduly circumscribed by ruling out the potential to which the land can be advantageously deployed at the time of the execution of the instrument or a period reasonably proximate thereto. Again the use to which land in the area had been put is a material consideration. If the land surrounding the property in question has been put to commercial use, it would be improper to hold that this is a circumstance which should not weigh with the Collector as a factor which influences the market value of the land. 28. The fact that the land was put to a particular use, say for instance a commercial purpose at a later point in time, may not be a relevant criterion for deciding the value for the purpose of stamp duty, as held by the Supreme Court in State of U.P. and others v. Ambrish Tandon and another, (2012) 5 SCC 566 . This is because the nature of the user is relateable to the date of purchase which is relevant for the purpose of computing the stamp duty. Where, however, the potential of the land can be assessed on the date of the execution of the instrument itself, that is clearly a circumstance which is relevant and germane to the determination of the true market value. At the same time, the exercise before the Collector has to be based on adequate material and cannot be a matter of hypothesis or surmise. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale-deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration. The Collector must have material on the record to the effect that there has been a change of use or other contemporaneous sale-deeds in respect of the adjacent areas that would have a bearing on the market value of the property which is under consideration. The Collector, therefore, would be within jurisdiction in referring to exemplars or comparable sale instances which have a bearing on the true market value of the property which is required to be assessed. If the sale instances are comparable, they would also reflect the potentiality of the land which would be taken into consideration in a price agreed upon between a vendor and a purchaser." 12. Therefore even if the declaration sought with respect to land purchased under the subject deed, is to be ignored as that fact occurrence took place after the execution of the subject deed, still it cannot be ignored that it is an admitted case to the petitioner that it had made plotting over other portion of the same Gata purchased by it, few months earlier i.e. in the year 2011. 13. Then, learned counsel for the petitioner may not be right in asserting that the report of the ADM is self contradictory. Merely because the land in question has been described as 'patt/khali', it does not lead to the conclusion sought to be drawn that therefore no plotting was being done. The report only indicates -there was no agricultural activity being carried out at the time of the spot inspection. It is in that context that further observations appears in that report that plotting was being done. Again since the petitioner admits to plotting with respect to the other portion of the same Gata purchased by it earlier, it remains largely irrelevant if plotting was being done on the portion of the land as was later purchased by the petitioner under the subject deed. Both land areas are contiguous, according to the petitioner. 14. Whichever way the issue may be looked at, clear case of deficiency of stamp duty paid is made out. The estimation made is on sound basis. In absence of any other ground, there is no occasion to interfere in the case. Thus estimation of stamp deficiency is upheld. However, imposition of penalty equal to the amount of stamp deficiency is found to be excessive. The estimation made is on sound basis. In absence of any other ground, there is no occasion to interfere in the case. Thus estimation of stamp deficiency is upheld. However, imposition of penalty equal to the amount of stamp deficiency is found to be excessive. Let the amount equal to the 10% of the stamp deficiency assessed be charged by way of penalty. 15. To the above extent, the impugned order dated 18.10.2012 is modified, the writ petition is partly allowed to that extent.