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2015 (7) TMI 104 - AT - Income TaxSale of agricultural land - distance of the agricultural land from the municipal limits of city - whether agricultural land in question is not a capital asset as per Section 2(14)(iii)(a) and (b) and surplus arising on sale of the same is not liable to tax - CIT(A) objected to assess the surplus amount on sale of agricultural land as business income - Held that:- Distance of 8 kms. has to be measured through approach road and not by straight line distance on horizontal plane or crow’s flight. Hence, this issue is decided in favour of the assessees. See CIT Vs. Satinder Pal Singh [2010 (1) TMI 752 - Punjab and Haryana High Court] The land in question was shown as agricultural land in the revenue record. Whether there was any agricultural income or not, is not the moot question to decide the issue, however, the important factor is to be decided as to whether the character of the land is agriculture or not. Undisputedly, in the revenue record and as per the Patwari certificate, the land in question is agricultural land. Therefore, the sale consideration was not taxable on the sale of said land i.e. either on account of capital gain or on account of business income. Any consideration received out of sale of agricultural land, cannot be treated as business income for the purpose of capital gain or for the purpose of business income, whatever the case may be.- Decided in favour of assessee.
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