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2023 (5) TMI 413 - ITAT DELHILong term capital gain - nature of land sold - capital asset u/s 2(14) - land as situated within Municipal Limit or not?- Disallowance of deduction u/s 54B/54F - assessee had not been able to substantiate the purchase of agricultural land subsequent to the said sale - Whether the land sold is a capital asset as per the provisions of the Act applicable to the A.Y. 2013-14? - HELD THAT:- The land in question is undisputedly situated in the village “Garhi Alawalpur” situated in the District Rewari which is within 5 KMs of the present Municipality “Dharuhera”. This Municipality has not been mentioned in the said notification. The Revenue could not bring to our notice any other notification issued wherein the Municipality “Dharuhera” situated in District Rewari is mentioned for the purpose of provisions of Section 2(14) of the Income Tax Act, 1961. As gone through the entire list of Municipal Committees/Municipal Counsel in the State of Haryana and we could not find “Daruhera” as notified Municipal Committee in the District Mahendragarh (Annexure-C). We have gone further to verify whether there is any village/municipality by name “Daruhera” in the entire district of Mahendragarh from the Government of Haryana public document (Annexure-D). We could find none. We have also gone through the list of PIOs as per the Directorate of Urban Local Bodies to verify whether any local body in the name of “Daruhera” (Annexure-E). We could find none. Hence, we apprehend that an error might have crept in the notification dated 06.01.1994. The concerned authorities may look into this issue. Since, the Tribunal cannot venture to alter/modify the notification, the issue is being adjudicated as per the notification in force. On going through the entire facts, it can be held that “Dharuhera” of District Rewari do not find place in the notification issued consequence to the provisions of Section 2(14) of the Income Tax Act, 1961. Hence, the land which is situated at Garhi Alawalpur cannot be treated as the capital asset, ergo the proceeds are not liable to tax under the head “Long Term Capital Gains”. We are conscious of the fact that the amendment in the said Section has been brought w.e.f. 01.04.2014 and the land in question before us was sold on 21.03.2013 pertaining to A.Y. 2013-14. Hence, the provisions applicable to that period has been taken into consideration. Since, the proceeds cannot be treated as taxable in the hands of assessee any adjudication on the issue of deduction u/s 54F and u/s 54B becomes only academic in nature and hence not resorted to.
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