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2013 (10) TMI 1035 - HC - Income TaxWhether land sold falls under the definition of capital assets u/s 2(14) of the Income Tax Act – Held that:- Reliance has been placed upon the judgment of the Hon’ble High Court in the case of CIT v. Smt. Anjana Sehgal reported in [2011 (3) TMI 695 - PUNJAB AND HARYANA HIGH COURT], wherein it has been observed land is urban land for the purpose of definition of 'capital asset' under section 2(14). The concept of municipality as a unit of State or the fact that a State has no jurisdiction to make law beyond its territory have no relevance for the purpose of determining whether particular land was 'capital asset' or not for the purpose of taxing capital gain. If the land is adjacent to a municipality and is urban land covered under section 2(14), even if municipality and the land fall in different States, the land will conti- nue to be urban land. If such land is excluded from the definition of 'capital asset', the purpose of statutory scheme will not be achieved – In the present case, land is situated within the municipal limits of Municipal Council, Sujanpur – Therefore, the asset is ‘Capital Asset’ – Liable to be taxed as capital gains - Decided in favor of Revenue.
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