Agricultural land sale within municipal limits treated as capital gains taxable under binding High Court precedent.

Profit arising from the sale of agricultural land situated within municipal limits was held exigible to capital gains tax because binding Division Bench rulings of the same High Court had already treated such transfer as taxable. The contrary view relied on by the assessee was not accepted, and the Tribunal's conclusion was found inconsistent with those precedents. The referred question was answered against the assessee and in favour of the Revenue.

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Issues: Whether the profit arising from the sale of agricultural land situated within municipal limits was liable to capital gains tax and whether such land could be treated as not being a capital asset for that purpose.

Analysis: The question referred had to be answered in the light of binding Division Bench decisions of the same Court, which had held that profit arising from the transfer of agricultural land is exigible to capital gains tax. The earlier view relied on by the assessee was therefore not accepted, and the Tribunal's contrary conclusion was found to be inconsistent with those binding decisions.

Conclusion: The land was liable to capital gains tax on sale, and the referred question was answered in the negative, against the assessee and in favour of the Revenue.

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