Any person who offers to purchase property at a particular amount should not be asked to make any deposit or furnish any bank guarantee. - Income Tax - 916/CBDT

INSTRUCTION NO. 916/CBDT Dated : January 31, 1976 Section(s) Referred: 269D Statute: Income - Tax Act, 1961 A case has come to the notice of the Board in which it was alleged by a complainant that the stated consideration in respect of a particular immovable property, the sale of which was registered, was under-stated and he was prepared to buy the property at a certain value much higher than the stated consideration. While the proceedings under Chapter XXA of the Income-tax Act, 1961 were being started, the Competent Authority asked the complainant to deposit the amount, which he was prepared to offer for the property, in the State Bank of India, and furnish a bank guarantee for that amount. This was done with a view to establish the bona-fides of the complainant. Eventually, the proceedings were dropped. 2. The Board are of the view that any deposit which may be made by a complainant after the sale has taken place and has been registered does not necessarily establish the market value of the property on the date of registration. On the other hand, unnecessary complications are likely to arise. They, therefore, direct that the complainant or any other person who offers to purchase the property at a particular amount should not be asked to make any deposit or furnish any bank guarantee to establish the bona fides of his offer.