TMI Blog1984 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the population referred in section 2(14)(iii)(a) refers to 'municipality' and not to 'area' comprised in it ? " The assessee in this case is an individual. On November 2, 1973, the assessee had sold 15 cents of agricultural lands together with a tiled house situate in Periakuppam village within the Trivellore Municipality for consideration of Rs. 27,000. Before the Income-tax Officer, the assessee claimed that the capital gains arising out of the sale of the above land were exempt by virtue of the provisions of section 2(14)(iii) of the Income-tax Act, 1961, hereinafter referred to as " the Act ", on the ground that Periakup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the said provision it is only the population within the municipal limit that is taken into account and not the population in any other local area as the village, ward, street, etc., and that in this case as the population of the municipality admittedly exceeds I 0,000, the lands transferred should be treated as a capital asset. In this case, it is common ground that the land sold by the assessee is agricultural land situate in Periakuppam village within Trivellore municipality. As per section 2(14)(iii)(a), agricultural land in an area of municipality with a population of more than 10,000 would fall within the term " capital asset ". Periakuppam village is an area within the Trivellore municipality and admittedly has a population o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the agricultural land should be in an area within the municipality ; and (2) that the area should have a population of more than 10,000. The expression " which has a population of not less than ten thousand according to the last preceding census " is intended to qualify only the " area " and not the " municipality ". However, it is not possible to go only by the language used in that provision without having regard to the object and intendment of the provision. If the Legislature meant to fix a minimum limit of population for any area within a municipality or cantonment Board, it would have specified a particular area such as village, ward, street, etc., and since the Legislature has left the area in municipality undefined, it would not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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