TMI Blog2017 (9) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... ther words, agricultural land situated within a municipality would constitute a ‘capital asset’ and therefore would be subject to capital gains tax upon the transfer of such asset. In the present case, the agricultural land of the Assessee that was acquired was situated within the Hisar municipality and, in terms of Section 2 (14) (iii) (a), was a capital asset, the transfer of which would attract capital gains tax under Section 45 of the Act. However, in terms of Section 10 (37) (i) income chargeable under the head ‘capital gains’, arising from transfer of such agricultural land located within the municipal limits, would not form part of the total income. Consequently, the impugned order of the CIT which holds to the contrary is both fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed his return of income on 30th July 2008 for the ( AY ) 2008-09 disclosing an income of ₹ 66,84,930/-. This included a sum of ₹ 59,63,727/- received as enhanced compensation for land acquired along with the statutory benefits as provided under Sections 23 (1A), 23 (2) and 28 of the Land Acquisition Act, 1894 ( LA Act ). 3. The Assessee s land, situated in the district of Hisar, had been acquired by the Government of Haryana. By an award dated 19th January 1995, the Land Acquisition Collector determined the compensation for the land. On a reference made by the land owners, including the Assessee, the Additional District Judge, by an order dated 29th January 1999, enhanced the compensation. This led to further appeals bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f agricultural land. It was further held that Section 10 (37) of the Act did not apply to the facts of the case. 6. Having heard learned counsel for the parties, the Court is of the view that the CIT was in error in holding that Section 10 (37) of the Act did not apply. There was no dispute that at the time when it was acquired by the Government of Haryana the Assessee s land was both an agricultural land and a capital asset within the meaning of Section 2 (14) (iii) of the Act which defined capital asset to mean, inter alia, property of any kind held by the Assessee but did not include agricultural land that was not situated within the jurisdiction of a municipality. In other words, agricultural land situated within a municipality w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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