ITAT asks the Govt. to bring out a mechanism to ensure tax recovery from ARCs/Banks on the sale of security assets

Last updated: 12 December 2022
Quick Summary
The Income Tax Appellate Tribunal (ITAT) has called on the government to create a system for recovering tax on the sale of security assets. This follows a case where a director, who provided personal guarantee and collateral for a company's loan, was involved in the sale of his property by an Asset Reconstruction Company (ARC). The ITAT questioned the clarity on the transfer date of the property and remitted the case for re-evaluation of capital gains tax, while highlighting the need to ensure tax is recovered from borrowers or those receiving sale proceeds.

Court :
ITAT Mumbai

Brief :
The Income Tax Appellate Tribunal, Mumbai Bench ("the ITAT") in the case of Abbasbhai A. Upletawala v. Income Tax Officer Ward 16(1)(1) [ITA No. 5332/Mum/2015 dated October 21, 2022] asked the government to bring out a mechanism to ensure tax recovery on the sale of security assets from the Asset Reconstruction Companies ("the ARCs") or banks. 

Citation :
ITA No. 5332/Mum/2015 dated October 21, 2022

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Bimal Jain
Published in Income Tax
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