850/CBDT. - Income Tax - 850/CBDT

INSTRUCTION NO. 850/CBDT Dated : July 14, 1975 Section(s) Referred: 269C , 4(1)(a) and 52(2) of GT Act Statute: Income - Tax Act, 1961 Attention is invited to Board's Circular No. 132, dated 26th March 1974 and No. 136 dated 24th May, 1974. It has been stated in the circulars that when consideration for transfer of any capital asset is determined or fixed by the Central Government or the Reserve Bank of India, such consideration shall be taken to be the market value of the asset on the date of its transfer, for the purposes of Section 52(2) of the Income-tax Act, 1961 and Section 4(1) (a) of the Gift-tax Act, 1958. 2. A question has been raised whether the provision of Chapter XXA of the Income-tax Act, 1961 should be invoked in a case where the consideration for transfer is determined or approved by the Central Government to the Reserve Bank of India. One of the conditions that must be satisfied before initiation of proceedings for the acquisition of property is that the competent authority must be satisfied that consideration for the transfer as agreed to between the parties has not been truly stated in the instrument of transfer with the object or objects mentioned in Section 269C(1)(a) or (b). This condition is not likely to be satisfied in a case where the consideration for transfer is determined or approved by the Central Government or the Reserve Bank of India. The Board, therefore, desire that the provisions of Chapter XXA of the Income-tax Act, 1961, need not be applied to cases of transfer of property to the Government or to the case where the full value of the consideration for the transfer is determined or approved by the Central Government or the Reserve Bank of India.