Hello Rashmi
Thanks for your questions.
Strictly speaking, section 109 is breached if a trustee of an SMSF deals with an asset of the fund with a counterparty in a manner more favourable to the counterparty than what would be the case if it had dealt with on an arm’s length basis.
Whilst the issues you raise clearly focus on market value concepts, given that the underlying transactions where in specie lump sum payments (that is, there was no consideration provided back the SMSF) I do not see these matters as giving rise to a section 109 breach.
I have no concerns about the way you have described the two matters you have raised.
Whilst I clearly have no familiarity with the Philippines real property market, I agree with your concerns that a market valuation approximately 14 1/2 months before a transfer cannot automatically be relied upon as evidence of market value for the transfer in July 2023.
Best regards
The Auditors Institute