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2022 (4) TMI 226 - ITAT MUMBAIGain arising out of car parking spaces - LTCG or STCG - HELD THAT:- In the agreement entered into by the assessee with the builders, M/s Dosti Corporation makes it clear that the sparking space No.176 was attached to the flat and therefore, for all purposes, it is part and parcel of the flat in question. So there is no question of treating the parking space No.176 independent of the flat and as a natural corollary, capital gain on sale of flat is long term capital gain which equally applies to the parking space No.176 also. So treating the parking space as distinct from the flat so as to treat the capital gain on sale as short term capital gain is totally unjustified. Objection of the assessing officer that the partnership firm in which the assessee is a partner has, has instead of debiting the account of the assessee, shown the amount under the head ‘Car Parking Space at Sewree A/c’ has been explained by the assessee that it was an accounting mistake which was subsequently rectified in FY 2012-13 Therefore, respectfully following the judgment in the case of The Nav Nirman Cooperative Group Housing Society Ltd vs A.K. Murarka & Ors. [2010 (10) TMI 1233 - DELHI HIGH COURT] we hold that the capital gain arose on sale of parking space No.176 is a long term capital gain in the form of improvement of asset. Other two car parking areas - We find that the assessing officer has recorded a clear finding that the assessee himself has accounted the assets in different entities; therefore, the assets are independent of the flat and is distinguishable from the cost of improvement. Further, the parking spaces can be sold and purchased to and from the members of the society independently - as per the books of the firm in which the assessee is a partner, the car parking spaces were transferred to the assessee in the financial year 2012-13 only. Therefore, in our considered opinion, the capital gain arising from the sale of these two car parking spaces is only ‘Short Term Capital Gain’. In this view of the matter, we have to necessarily uphold the finding of the CIT(A) that the parking spaces are independently identifiable asset on different dates, the capital gain arose from sale of these two parking spaces is ‘Short Term Capital Gain’. AO has rightly assessed the gain as Short term capital gain in the case of other two parking spaces. This ground of appeal is partly allowed. Once the gain arising out of car parking spaces is held as Short Term Capital Gain, then the amount being consideration attributable to the car parking spaces be reduced from the sale consideration of the flat for computing long term capital gain - We find merit in the argument of the assessee. The assessing officer is directed to exclude the amount pertaining to; two other parking spaces from the sale value of the asset for computation of long term capital gain. Ground 2 of the assessee is allowed.
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