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2015 (9) TMI 755 - DELHI HIGH COURT

2015 (9) TMI 755 - DELHI HIGH COURT - [2015] 378 ITR 71 (Del) - Computation of capital gain - whether sale of the said land is not taxable because the land was agricultural land which did not fall within the definition of capital asset under Section 2(14)? - Whether distance up to the land should be considered or up to the village within which such land is situated? - Held that:- The Court is of the view that for the purposes of Section 2 (14) (iii) (b) of the Act, the distance had to be measure .....

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On the strength of the certificate produced by the Assessee from the former Additional Director General, CPWD that the distance of the land from the outer limit of the Gurgaon Municipality was 10.4 Kms, the ITAT held that the land owned by the Assessee did not fall within Clauses (a) or (b) of Section 2 (14) (iii). - Decided against revenue. - ITA 714/2015 - Dated:- 14-9-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr Rohit Madan and Mr Zoheb Hossain, Standing Counsel For the .....

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AO ) noted that on 9th September, 2005, the Assessee had sold a property admeasuring 5.9625 acres located at Village Ghata, Tehsil Sohna, District Gurgaon. The stand of the Assessee was that the capital gain from the sale of the said land is not taxable because the land was agricultural land which did not fall within the definition of capital asset under Section 2(14) of the Act. 5. According to the Assessee, the land did not fall within a distance of 8 km from the outer limit of the Gurgaon Mun .....

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line method has not been employed" by the said architects. The AO preferred the certificate of the Tehsildar, Sohna District and of the Engineer of the Gurgaon Municipal Corporation which stated that the distance was 6.6 Kms. The AO interpreted the Circular of the CBDT which clarified that for the purpose of Section 2(14)(iii)(b) of the Act, agricultural lands that would be exempt from the definition of 'capital asset' were those that were located in "areas upto a distance of 8 .....

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uitous method or even the distance by road. the PWD was of the view that the distance had to be calculated from the outer limit of Gurgaon municipality to Village Ghata where the land was located." Accordingly, the AO held that as per Section 2(14)(iii)(b) of the Act, the agricultural land sold by the Assessee was a capital asset. He accordingly made an addition of ₹ 7,75,12,500/- to the income of the Assessee as long term capital gains. 6. The CIT (A) rejected the certificates relied .....

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furnished by the AO from the Directorate of Survey (AIR) and the DGDC Data Centre, New Delhi and concluded that the "shortest distance along the road from IFFCO Junction on the Municipal boundary up to Northern outer limit of Ghata, the Village in which the land is situated is 7.17 Kms. along the road." Consequently, the CIT (A) affirmed the order of the AO that the land sold by the Assessee was a capital asset. 7. Aggrieved by the said order of the CIT(A), the Assessee preferred an a .....

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n any area within such distance not being more than 8 Kms. from the local limits of any municipality' would mean the land should be within such area which is not more than 8 Kms. from the local limit of the municipality." 8. The ITAT concluded that the land had to be within the distance of 8 Kms. from the outer limit of the Gurgaon municipality and not from the outer limit of ITA 714/2015 Page 5 of 6 the village Ghata in which the land was located. On the strength of the certificate pro .....

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