TaxTMI 
TaxTMI 
1991 (8) TMI 351
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.... circumstances of the case, the lands acquired by the Government were agricultural lands, the answer has been in favour of the assessee holding that the lands acquired were agricultural lands. On question No. 4, whether on the facts and in the circumstances of the case, the mere claim of the assessee for additional compensation can be taken into account for purpose of determining the capital gains derived by the assessee, has gone in favour of the assessee and against the Revenue. 3. The following two questions survive answered against the assessee : 2. Whether on the facts and in the circumstances of the case, the interpretation given by the Tribunal based upon the definition of 'capital asset' in Section 2(14)(iii)(a) ....
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....n 2(14)(iii)(a) of the Income-tax Act, 1961, as it stood at the relevant time, the plea of the assessee was that his land was in an area which in terms meant a 'village' and the population of that village was far below ten thousand. It was further maintained that the mere fact that the said area fell within the municipality of Hyderabad, even though having population of more than ten thousand, was of no consequences. The High Court interpreting Section 2(14)(iii)(a) of the Act opined on question No. 2 that the property acquired was a 'capital asset' as the words 'which has got a population of more than 10 thousand' in the Section would qualify only 'the municipality or cantonment' and not the expression '....
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....it of population fixed is to identify the focal point where transactions of lands attract taxation. 6. It is common knowledge that in the entire country local self-Government is carried out under various statutes by means of municipalities, Municipal Corporation, cantonment boards etc. After their initial set up, areas by means of those laws are added to and subtracted from and subsume as such for identity, not as a separate municipal unit but part of the already set up municipal unit. Such being the scheme of things, it is difficult to accept the plea of the appellant that even though his village was falling in the municipal area of Hyderabad it retained its identity as a village and hence an ' area so as to stand apart for the purp....
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....unicipality may comprise of many villages, wards and streets and each assessee may claim that the limit of population is provided with reference to a village, ward or street. In such an event, the section will have no uniform application and will lead to many anomalies. Therefore, it is necessary to avoid such an interpretation of the section which leads to anomalies and which will make it invalid. We have to adopt such a construction which will make the section valid and certain. 7. This in our view is the correct position and has aptly and pithily been put. Nothing more is needed to be said on the subject. The interpretation put by the High Court on the provisions appears to us to be unexceptionable and rational. We affirm that interpr....