COMMISSIONER OF INCOME TAX Vs. MADHUKUMAR N.

JUDGEMENT

(1.) In this appeal under Section 260A of the Income-tax Act, 1961 [for short, 'the Act'] the revenue has questioned the correctness of the order of the Income Tax Appellate Tribunal, Bangalore 'C' Bench, Bangalore passed on 27.02.2009 in ITA/No. 1043(Bang)/2008. The assessee is a Hindu undivided family and the assessment year is 2005-06. The question is as to whether the agricultural land belonging to the family sold on 02.03.2005 for a total consideration of Rs. 52,00,000/- resulted in long term capital gain in a sum of Rs. 48,94,784/-.

(2.) The assessee claimed that the amount does not amount to capital gain as the sale was attributable to the agricultural land and not coming either within the limits of any municipality or within the distance of 8 kms, from any notified municipality or urban area.

(3.) This was the bone of contention between the assessee and the revenue and while the revenue took a stand that the subjected land was located within 8 kms. of Dasarahalli City Municipal Council. The Tribunal chose to accept the version of the assessee placing reliance on the certificate issued by Dasanapura Gram Panchayath to the effect that the population of Adakemaranahalli village within whose limits the land was located was less than 10,000 and therefore opined that the subject land cannot be considered as one coming within the definition of 'capital asset' under Section 2(14)(iii)(a) & (b) of the Act.