Circular No. 136-Income Tax dated 24-5-1974

The Board have examined the question whether the provisions of section 4(1)( a) should be invoked in cases where the consideration for the transfer of property is determined, fixed or approved by the Central Government or the Reserve Bank of India. It has been decided that when any property is transferred and the consideration for such transfer is determined, fixed or approved by the Central Government or the Reserve Bank of India, then such consideration shall be taken to be the market value of the property at the date of its transfer.  If the transferor contends that the market value is more than the amount so determined, fixed or approved, then the amount claimed by the transferor on account of the said property shall be taken to be its market value until a final decision is arrived at as to the amount actually payable to the transferor by the transferee.

Circular : No. 136 [F. No. 331/1/74-GT], dated 24-5-1975.