Capital gains on agricultural land acquisition remain taxable where precedent and statutory definition support the levy.

Capital gains arising from the acquisition of agricultural land were held taxable under the Income-tax Act because binding Kerala High Court precedent had already concluded that such gains attract tax. The later amendment to the definition of "capital asset" in section 2(14) by the Finance Act, 1989, was noted as reinforcing that position. The challenge to the levy therefore had no merit and was rejected, leaving the taxability of capital gains on acquisition of agricultural land confirmed on the basis of precedent and statutory definition.

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Issues: Whether capital gains arising from the acquisition of agricultural land could be brought to tax under the Income-tax Act.

Analysis: The question was covered by binding decisions of the same Court holding that capital gains tax is exigible even where the asset acquired is agricultural land. The later amendment to the definition of capital asset in section 2(14) of the Income-tax Act, 1961, by section 3 of the Finance Act, 1989, was also noticed as reinforcing the position that the contention against taxability had no merit.

Conclusion: The challenge to the levy of capital gains tax on the acquisition of agricultural land was rejected.

Final Conclusion: The original petition failed and was dismissed, with no order as to costs.

Ratio Decidendi: Capital gains arising from acquisition of agricultural land are taxable where binding precedent and the statutory definition of capital asset support such levy.

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