Please guide me on below issue, Assessee is having Shop on lease/rental basis taken from local Body since 1980 and now the assessee sold the said shop to 3rd person, can he claim "Index Cost of Acquisition" on the said shop considering FMV as on 01 April, 2001?
25 July 2020
Such shops or premises given by local bodies on lease/rental basis are generally Non-transferable and user has just the right to use the premises and has no Title on such premises/shop to sell the same. You should check the details first from the local governing body about such right and legality of this sale transaction. Otherwise, for any transaction of Capital gain/loss nature will attract indexation benefits for FMV calculations.
25 July 2020
Thank you Mr. Punit for your reply. Assessee has transferred right he has, to use the shop for commercial purpose with NOC of concerned owner and got consideration for it.
But I got the your view, that in case of any transection of Capital Gain/Loss, one can consider FMV as Cost of Acquisition, right?
27 July 2020
Such premises are not acquired free of cost and Local bodies charge reasonable premium on such transactions and the same amount paid for taking possession of such property is to be taken as Cost of Acquisition.
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