Rajya Sabha MP Arora urges finance minister to address pressing issues in next budget

Arora apprised the finance minister that under IBC, pursuant to transparent bidding process, ownership and management of the corporate debtor is transferred to resolution applicant

Member of Parliament (MP) Rajya Sabha from Ludhiana, Sanjeev Arora, on Wednesday met Union finance minister (FM) Nirmala Sitharaman in Delhi and urged her to consider pressing issues pertaining to taxpayers and industry in the upcoming budget.

Rajya Sabha MP Sanjeev Arora also sought an action to address the huge pendency of appeals before the commissioners of income tax (appeals) nationwide.

In a statement on Thursday, Arora said he brought to the notice of the FM a matter of significant importance concerning the acquisition of assets under the Insolvency and Bankruptcy Code (IBC), 2016.

Arora apprised the FM that under IBC, pursuant to transparent bidding process, ownership and management of the corporate debtor is transferred to resolution applicant. Accordingly, as part of the resolution plan/ liquidation proceed under the IBC, the corporate debtor issues fresh shares and/or the existing shares are transferred to resolution applicant, the highest bidder, at the bid amount.

At times, the bid amount may not correspond to and may be lower than the fair market value determined as per the artificial formula given in the income tax rules. Since assets are acquired as part of transparent/open bidding process, it cannot be said that the shares/asset have been acquired at less than its fair market value.

Further, Arora brought the FM’s attention towards the need for amendments in the Income Tax Act concerning the exemption of compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (RFCTLAR), 2013, and the compensation received through monetisation of Transferable Development Rights (TDR).

He said, moreover, certain state governments have introduced TDR certificates as an alternative mode of compensation to expedite the process of compulsory land acquisition. These certificates can be monetised by the landowner, providing them with compensation without direct financial outlay from the government.

Arora also sought an action to address the huge pendency of appeals before the commissioners of income tax (appeals) nationwide. He also took up the issue of rationalisation of income tax rates for individuals.

Arora stated that FM has assured to look into the suggestions for the upcoming central budget.