TaxTMI 
TaxTMI 
1983 (11) TMI 14
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....purposes and the agricultural income from these lands is disclosed in the return of income filed by the petitioners. By a conveyance dated February 28, 1974, the petitioners sold a portion of the said agricultural land admeasuring 42,788 square metres to Uni Abex Alloy Products Ltd. for a price of Rs. 4,86,700. By another conveyance dated March 29, 1974, the petitioners sold a further portion of the said agricultural land with a farm house and a small portion of non-agricultural land, all together admeasuring 38,148 square metres to Universal Ferro & Allied Chemicals Ltd. for a price of Rs. 4,33,743. Out of the lands sold under this conveyance, non-agricultural land admeasured 7,383 square metres and the proportionate sale price of nonagr....
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....uary 6, 1973, when these lands were brought within the purview of the I.T. Act. The Income-tax Appellate Tribunal confirmed the original assessment which was made on the basis of the market value of said land as on January 1, 1954. A reference in respect of these findings was granted on the application of the petitioners, and this reference is still pending. Thereafter, at later date, the petitioners made an application for amending the reference by raising an additional question of law as to whether any capital gains tax was payable in respect of these sales. This application was rejected by the Tribunal, since this point had not been raised before the Tribunal at all. The petitioners thereafter filed a miscellaneous application on the....
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....cultural lands mentioned earlier. In respect of this assessment order also, the application for referring additional questions of law was rejected and a miscellaneous application made in that respect to the Tribunal was also rejected. The short question that arises for determination in the present petitions is whether any tax is payable in respect of capital gains arising from the sale of agricultural lands. Under the amended sub-cl. (iii) of cl. (14) of s. 2 of the I.T. Act, 1961, "capital asset " does not include : " (iii) agricultural land in India, not being land situate-... (b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item ....