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CS Professional · Corporate Restructuring, Valuation and Insolvency · Taxation and Stamp Duty Aspects of Corporate Restructuring

Rohan Infra Ltd transferred a capital-asset plot for ₹90,00,000 when the stamp duty value was ₹1,00,00,000. It claims the fair market value on the transfer date was only ₹92,00,000 and has not disputed the stamp duty value in any appeal. The Valuation Officer, on reference by the Assessing Officer, determines the value at ₹1,05,00,000. What is the full value of consideration under section 78?

The full value of consideration is ₹1,00,00,000. Since the stamp duty value exceeds 110% of the consideration, it is deemed the consideration. On the assessee's reference, section 78(3) says that if the Valuation Officer's value is higher than the stamp duty value, the stamp duty value is taken, not the higher figure.

  1. A₹90,00,000, the actual consideration
  2. B₹92,00,000, the assessee's claimed fair market value
  3. C₹1,00,00,000, the stamp duty value, since the Valuation Officer's value exceeds itCorrect
  4. D₹1,05,00,000, the Valuation Officer's value

Explanation

Stamp duty value of ₹1,00,00,000 is 111.1% of ₹90,00,000, so the 110% relief does not apply and stamp duty value is deemed the consideration. Under section 78(3), if the Valuation Officer's value exceeds the stamp duty value, the stamp duty value is taken as the full value. The higher officer value is not used.

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