Modalities of fixing the reserve price of properties purchased under Ch.XXC. - Income Tax - 1857/1990

Superseded vide INSTRUCTION NO. 2/2013 DATED 5-2-2013. INSTRUCTION NO. 1857/1990 Dated: September 19, 1990 As decided in the 6th Conference of Appropriate Authorities at Bombay on May 2-3, 1990 and communicated vide minutes thereof, comprehensive instructions on the modalities of fixing the reserve price for auction of properties purchased under Chapter XXC are as under:- 1. The limit of reserve price at 115% of the apparent consideration is only the minimum limit. It is for the concerned Chief Commissioners of Income-tax to fix the reserve price at a figure higher than 115% of the apparent consideration, if he considers it a fit case for such higher reserve price or if the local market rates/market conditions so warrant. 2. In cases where the property is not sold after being placed repeatedly for auction, the Chief Commissioner of Income-tax should make special efforts to sell the property through auctioneers. If necessary, a higher commission to auctioneers could be considered so that they are encouraged to put in extra efforts. 3. In cases where it is considered necessary by the Chief Commissioner of Income-tax to fix reserve price below 115% of the apparent consideration, proposals should be sent to the Board, giving detailed reasons. There is no gain-saying the fact that every effort should be made to avoid sending such proposals by taking prompt action for disposal. The very purpose and objective of acquiring properties under Chapter XXC would be defeated if we have to sell the properties at a rate lower than that visualised at the time of purchase. 4. The question of increasing the reserve price by 1% for each month of delay in auction has also been considered. It is likely that such monthly enhancement may sometimes push the price up to an unrealistically high figure may render the property unsaleable. To avoid such eventuality, every effort should be made to auction the property within 3 months of the completion of all formalities under chapter XXC.