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2013 (10) TMI 594 - AT - Income TaxCapital asset u/s 2(14)(iii)(b) - Whether the land in question though located beyond 8 kms from the Municipal Limits of Jaipur Municipality as on the date of notification dated 06-01-1994 but subsequently it falls within the distance of 8 kms from the Municipal Limits due to the expansion of the Municipal Limits would still be regarded as agricultural land not falling in the definition of capital asset - Held that:- in order to determine whether the land in question falls under mischief of sub-clause (b) of Section 2(14(iii) of the Act, the distance of 8 kms has to be taken into account in terms of notification dated 6-01-1994 - Therefore, land in question which was located beyond 8 kms from the Municipal Limits as on 6-01-1994 when the notification was published in the official gazette, the same would fall under the exclusion clause of the term 'capital asset' as per provisions of 2(14)(iii)(b) of the Act. Whether the land in question can be termed as an agricultural land and not falling under the definition of expression asset - Held that:- It is not the mere potentiality but its actual condition and intended user which have to be seen for the purpose of exemption. The determination of character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case - the issue has not been examined by the lower authorities by considering this aspect of actual use of the land in question by the assessee and the purchaser because it has been treated as capital asset by invoking the provisions of sub-clause (b) of clause (iii) of Section 2(14) of the Act. Therefore, this issue is required to be examined after verification of the relevant facts - Following decision of Sarifabibi Mohmed Ibrahim And Others Versus Commissioner of Income-Tax [1993 (9) TMI 10 - SUPREME Court] and CIT v. Raja Benoy Kumar Sahas Roy [1957 (5) TMI 6 - SUPREME Court] - Decided partly in favour of assessee.
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