2010 (1) TMI 752

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....order dated 31.3.2009 passed by the Income Tax Appellate Tribunal, Chandigarh (for brevity 'the Tribunal') in ITA No. 641- CHD-2004 alongwith Cross Objection 38 Chandi/2006. The Tribunal after dealing with various aspects of the matter has disposed of the appeal filed by the Revenue alongwith the cross objection of the assessee- respondent. In respect of the question concerning distance of the agricultural land from the municipal limits of city of Khanna the Tribunal has decided the issue holding that distance of 2 kms. from the municipal limits of city of Khanna has to be reckoned for the purposes of Section 2(14)(iii) of the Act by measuring the same as per the road distance and not as per straight line distance on a horizontal pl....

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....efore the assessing Officer?"   3. During the course of hearing, we have found that question Nos. (2) and (3) are pure questions of fact and would not result into any substantive questions of law which are required to be adjudicated by this Court. Accordingly, we proceed to consider question No.1. 4. A perusal of the order passed by the Tribunal shows that once the principle of measuring distance has been settled namely that the distance of the agricultural land belonging to the assessee- respondent has to be measured in terms of the approach by road and not by a straight line distance on horizontal plane or as per crow's flight. The Tribunal has placed firm reliance on a judgement delivered by Mumbai Bench of the Tribunal in....

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....."   6. A perusal of the aforesaid provision shows that 'capital asset' would not include any agricultural land which is not situated in any area within such distance as may be specified in this behalf by a notification in the official gazette which may be issued by the Central Government. The maximum distance prescribed by Section 2(14)(iii)(b) of the Act which may be incorporated in the notification could not be more than 8 Kms. from the local limits of municipal committee or cantonment board etc. The notification has to take into account the extent of, and scope for urbanization of that area and other relevant considerations. The reckoning of urbanization as a factor for prescribing the distance is of significant which wo....