Assessee was a director of company ASCL. Assessee gave a land owned by it as collateral security as a guarantor to a bank against loan taken by ASCL.  Bank recalled credit facilities given to ASCL and invoked personal guarantee given by assessee.  Land of assessee which was offered as collateral security was assigned to ARCIL for further sale to recover loan amount for bank.  land was sold by ARCIL to company ADPL.  Assessing Officer held  that market rate of land as per stamp duty valuation was at much higher amount than LTCG shown by assessee. AO taxed the entire amount of LTCG to tax in hands of assessee. The year of taxability was not examined by the AO. Matter remanded-Court made observation that the law may be amended to recover the tax from the borrower. (AY. 2006-07)

Per court : With the increasing number of cases in which recovery measures are enforced by selling properties, held by bankers and ARCs as collateral securities, it is time that the Government seriously considers protecting its legitimate interests by ensuring some mechanism to ensure that tax liability on capital gains is duly recovered from borrower whose property is sold and when it is not possible to do so on account of borrower’s genuine financial difficulties from person who receives proceeds of sale of securitized assets.