INCOME TAX ACT, 1961

Section 55A

Capital gain - Fair market value - Determination - Consideration of common area or not when offices were sold by assessee

Dispute was regarding the fair market value adopted by the AO in respect of two offices. The Tribunal has observed that the DVO in his valuation report stated that these two office were situated at 3rd floor of the building whereas as per sale deed sight plot attached to the sale deed these two offices are situated a second floor of the building. Therefore, the matter was set aside to the record of AO/DVO for determination of fair market value of these two offices after verification of the correct facts and accordingly the valuation should be based on correct facts. Now, the assessee has pointed that while setting aside the issue the Tribunal has not commented regarding actual area sold by the assessee. Held: The AO/DVO has considered the total area of these two offices at 283.80 sq. mt. as against area of 247.49 sq. mt. sold by the assessee as per sale deed. The AO/DVO added the common area of 36.31 sq. mt. in the area of these two office. What was sold by the assessee was the offices no. 202 & 203 and the area as per sale deed shall be considered as the actual area sold by the assessee. The common area in the building which is clearly described in the sale deed and available for the purpose of ingress, aggress as well as common use cannot be added to the area of these offices but certainly these facilities available to the offices sold by the assessee would increase fair market prices of the offices in question. Accordingly, AO/DVO was directed to determine the fair market value by considering these common areas a positives factor while determining the fair market value of the offices but the common area cannot be considered as the area sold by the assessee when only offices are sold.

REFERRED :

FAVOUR : Partly In assessee's favour

A.Y. : 2014-15

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