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2019 (4) TMI 358 - ITAT MUMBAILTCG - sale of apartment - right to own / obtain conveyance of immoveable property - possession v/s acquisition - commencement certificate itself for construction of flat sold was issued by MCGM to builder only 08.04.2009 and the purchase agreement was registered in December 2009 - part performance u/s 53A of the property Act - HELD THAT:- Whatever rights were obtained by the assessee vide reservation of allotment letter dated 16/03/2005, the same rights have been transferred during the impugned AY as against the argument of revenue that the rights first got converted into new asset upon execution of agreement between the assessee and the builder which has been sold subsequently. In our opinion, the execution of stated agreement in assessee’s favor was nothing but mere improvements in the assessee’s existing rights in the property. Undisputedly, the right to own / obtain conveyance of immoveable property was a capital asset in terms of judgment of CIT Vs Tata Services Ltd. [1979 (1) TMI 26 - BOMBAY HIGH COURT] and CIT Vs Sterling Investment Corporation Ltd. [1979 (2) TMI 19 - BOMBAY HIGH COURT]. Therefore, the conclusion drawn by first appellate authority that the gains were Long-Term Capital Gains in nature as counted from 16/03/2005 would require no interference on our part. The appeal stands dismissed to that extent. Manner of computation of the gains - indexation benefit against the cost of acquisition - assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010 - HELD THAT:- Assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010. As against the same, the assessee has sought indexation of full cost on the basis of index for 2005, which, in our considered opinion, is not justified. Logically, the indexation was to be done by applying the indexes of the respective years in which the payments were actually made by the assessee which is in line with the decision of this Tribunal rendered in Lakshman M.Charanjiva Vs ITO [2014 (3) TMI 181 - KERALA HIGH COURT]. Therefore, taking the same view rendered in Nirmal Kumar Seth Vs CIT [2011 (10) TMI 7 - ALLAHABAD HIGH COURT], we direct Ld. AO to work out the indexed cost after applying indexes of the respective years in which the payments has actually been made by the assessee. Short term capital gain - sale of additional garage - bifurcation of sale - HELD THAT:- Additional garage has been purchased by the assessee only during November, 2009 which establishes that is was capable of being transacted separately and therefore, constitute a separate capital asset in the hands of the assessee. Therefore, the gain from transfer of this additional garage would be short-term capital gains only. Since the sale consideration is composite one, Ld. AO, with assistance of the assessee, is directed to bifurcate the sale consideration on some reasonable basis to work out the resultant gains.
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