TMI Blog1997 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Income-tax Appellate Tribunal is right in law in upholding the decision of the Appellate Assistant Commissioner that capital gains arising from transfer of agricultural land located within the municipal limits is not liable to capital gains tax?" The assessee is a Hindu undivided family by status and in the accounting period ending on March 31, 1981, relevant to the assessment year 1981-82, sold agricultural land on February 12, 1981, and February 27, 1981, for a consideration of Rs. 65,100. The agricultural land sold was situated within the municipal limits of Bhatinda city. The assessee did not disclose any income under the head "Capital gains" by relying upon the decision of the Bombay High Court in Manubhai A. Sheth v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s come up in reference before this court. Mr. B. S. Gupta, learned counsel appearing for the Revenue, relying upon a judgment of this court in Tuhi Ram v. Land Acquisition Collector [1993] 199 ITR 490, contended that the sale of agricultural land situated within the municipal limits would come within the ambit of a capital asset and the transfer of the same would attract capital gains. We find force in the submission of Mr. Gupta. This court in Tuhi Ram v. Land Acquisition Collector [1993] 199 ITR 490 specifically differed from the view taken by the Bombay High Court in Manubhai A. Sheth's case [1981] 128 ITR 87 and held that the Explanation inserted in section 2(1A) by the Finance Act, 1989, with effect from April 1, 1970, has brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1989, with effect from April 1, 1970, makes the position clear when it declares that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2. The Explanation completely renders ineffective the ratio of the decision in Manubhai A. Sheth v. N. D. Nirgudkar [1981] 128 ITR 87 (Bom)." Following the view taken by this court in Tuhi Ram's case [1993] 199 ITR 490, it is held that the Tribunal was not right in law in holding that the capital gains arising on the transfer of agricultural land situated within the municipal limits was not chargeable to income-tax in the assessee's hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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