1997 (9) TMI 68

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....case, the Appellate Tribunal is right in law in holding that capital gains arising on the transfer of agricultural lands situated within the municipal limits were not chargeable to income-tax in the assessee's hands in accordance with the provisions of section 2(14) as amended with effect from April 1, 1970, of the Income-tax Act, 1961?" The assessee is a Hindu undivided family and the relevant assessment year is 1974-75 for which the accounting period ended on March 31, 1974. It derived income from house property and agricultural land. During the accounting year, it sold agricultural land measuring 20 kanals, 19 marlas, situated within the municipal limits of Abohar Municipality. The return of income for the assessment year 1974-75 was ....

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....rt 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 thus transfer of the same would attract capital gains tax. We find force in the submission of Mr. Bansal. This court in Tuhi Ram's case [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 about a change in the law and after that date the sale made of certain specified agricultural lands situated in the municipal limits would attract capital....