07 December 2015
To clarify, my question was : what method AO uses to determine the cost of construction, does he vouch the bills of materials, labour etc...which in many cases pakka bills are not available , or he uses some other method like cost per square foot multiplied by total squarefeet constructed or some other method, please throw some light on this who have dealt such cases, thanks.
07 December 2015
Actual Cost.....as declared by the assessee. If , to the best of AO's knowledge and belief, the cost so declared by the assessee is NOT acceptable to AO, then AO has the option to refer the case to the valuation officer.
If the bills, evidence etc produced by the assessee is not acceptable to even the valuation officer, he may proceed on to value the house based on the quality of construction and the then prevailing market rate.
07 December 2015
Thanks Amol, are there some guidelines/rules under income tax act for valuation officer as to how he is suppose to value the construction which we can refer, please let me know ? Thanks.
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