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REPRESENTATIVE INSTITUTIONAL ENGAGEMENTS

Client Profiles — Five Institutional Painting Valuation Engagements

These anonymised profiles illustrate how a Government Approved Painting Valuer applies different valuation methodologies depending on the statutory purpose, authority, valuation date and market evidence available for the artwork.

The engagements below cover Section 55(2)(b) retrospective valuation, IBC CIRP, SARFAESI enforcement, Ind AS audit certification and Section 80G museum donation.

INSTITUTIONAL COVERAGE 05 REPRESENTATIVE
ENGAGEMENTS

Tax IBC Banking Audit Donation

CAPITAL GAINS • ESTATE • RETROSPECTIVE FMV

The CA With a Client’s PAG Estate and Section 55(2)(b)

VALUATION PURPOSE Capital Gain

A CA’s client is distributing an estate that includes a Krishen Khanna Bandwallah painting, acquired in 1989 for ₹3.5 lakh. The heir plans to sell it at Saffronart. Current auction FMV: ₹85 lakh.

Without the Section 55(2)(b) retrospective FMV, the indexed cost calculation produces an LTCG position requiring comparison between the available Finance Act 2024 computation methods.

A2Z Valuers establishes the 1 April 2001 FMV from Pundole’s 2001–2002 records for comparable Krishen Khanna works at ₹8.2 lakh.

COMPARATIVE TAX OUTCOME SECTION 55(2)(b)

Without retrospective certificate ₹13.42L Method A

Method B without 2001 FMV ₹8.39L 12.5%

Method A using established 2001 FMV ₹11.05L 20% + CII

Method B from 2001 FMV ₹9.60L 12.5%

ENGAGEMENT OUTCOME Section 55(2)(b) certificate produces the best outcome under the stated computation.

The stated comparison indicates an approximate ₹2.4 lakh tax saving versus the without-certificate computation.

IBC • CIRP • ART GALLERY

The Resolution Professional and the Gallery CIRP

VALUATION PURPOSE IBC / CIRP

A Resolution Professional manages the CIRP of a Delhi art gallery whose assets include 12 paintings held as inventory, three paintings held as capital assets and gallery furniture.

The inventory consists of contemporary Indian art with undocumented attribution and total acquisition cost of ₹42 lakh. The authenticated capital assets include two Pahari miniatures and one Bengal School wash.

The valuation distinguishes between inventory treatment, capital asset valuation, Fair Value and Liquidation Value, while authentication and market liquidity are considered separately.

INVENTORY FMV ₹38L Below acquisition cost

CAPITAL ASSET FMV ₹22.3L Pahari + Bengal School

TOTAL FAIR VALUE ₹60.3L Entire collection

TOTAL LIQUIDATION VALUE ₹36.4–44.4L Collection range

IBBI-COMPLIANT VALUATION

The valuation report is delivered to the Resolution Professional for inclusion in the Information Memorandum, with authentication and liquidity risks reflected in the valuation.

BANKING • SARFAESI • COLLATERAL

The Bank Officer With PAG Paintings as SARFAESI Collateral

VALUATION PURPOSE Enforcement

A private-sector bank holds three authenticated PAG paintings as collateral against a ₹4 crore personal loan. The collection includes an S.H. Raza Bindu, a Krishen Khanna Bandwallah and an attributed F.N. Souza figurative work.

A2Z Valuers’ SARFAESI enforcement certificate establishes both Market Value and Distressed Sale Value, with the DSV reflecting the specific work’s auction liquidity and authentication risk.

PAINTING MARKET VALUE DSV

S.H. Raza Bindu ₹7.50 Cr ₹5.25 Cr

Krishen Khanna Bandwallah ₹1.30 Cr ₹0.91 Cr

F.N. Souza Figurative ₹0.95 Cr ₹0.57 Cr

TOTAL ₹9.75 Cr ₹6.73 Cr

SECURITY COVERAGE The stated ₹4 crore bank exposure is covered by the assessed Distressed Sale Value.

The DSV incorporates the different liquidity profiles of authenticated blue-chip works and an attributed work with authentication uncertainty.

CORPORATE • IND AS • STATUTORY AUDIT

The Corporate CFO and the Ind AS Audit

VALUATION PURPOSE Annual FMV

A mid-size infrastructure company holds 28 paintings on its balance sheet with a carrying value of ₹18.4 crore, classified under Ind AS 40.

The statutory auditor requires a current Fair Market Value certificate for the annual audit. Each painting is individually identified and assessed using the appropriate available market evidence.

TOTAL PAINTINGS 28

PAG SCHOOL WORKS 6 ₹14.2 Cr FMV

INDIAN MODERN 8 ₹2.8 Cr FMV

CONTEMPORARY ART 14 ₹1.9 Cr FMV

CARRYING VALUE ₹18.4 Cr

→

FMV ₹18.9 Cr

DIFFERENCE ₹50 Lakh

AUDIT DELIVERABLE Comprehensive painting schedule prepared for the statutory auditor.

The stated difference represents a modest revaluation gain recognised in profit or loss under the Ind AS 40 fair value model.

MUSEUM • DONATION • SECTION 80G

The Museum and the Section 80G Donation

VALUATION PURPOSE Donation FMV

A collector donates a significant Ram Kumar Varanasi landscape — oil on canvas, 75 × 90 cm, authenticated and documented at Pundole’s in 2019 — to the NGMA Delhi.

A2Z Valuers establishes the contemporaneous FMV using recent comparable Ram Kumar Varanasi landscape auction records from Saffronart and Christie’s.

Adjustments are considered for size, condition and period, including the significance of the 1965 Varanasi period represented by the donated work.

ESTABLISHED FMV ₹3.8 Crore Section 80G donation valuation

SAFFRONART ₹3.1 Cr 2024 comparable

CHRISTIE’S ₹4.2 Cr 2023 comparable

VALUATION ₹3.8 Cr Adjusted FMV

DONATION CERTIFICATION Contemporaneous Section 80G FMV certificate prepared for the institutional gift.

The stated certificate establishes the FMV of the donated painting for the donor’s applicable income tax deduction and the receiving institution’s gift acceptance process.

HAVE A SIMILAR VALUATION REQUIREMENT?

Your Painting May Need More Than a Market Estimate.

Whether the requirement involves capital gains, IBC CIRP, SARFAESI, corporate audit, Section 80G or another institutional purpose, the valuation methodology and report format must match the intended statutory use.

GET EXPERT ADVICE → CALL A2Z VALUERS +91 9999992343