COMMISSIONER OF INCOME TAX Vs. NEERU AGGARWAL

JUDGEMENT

(1.) This order shall dispose of I.T.A. No. 209 of 2012, wherein the Revenue has claimed the following substantial question of law:--

(2.) The land of the appellant is situated at village Islampur, District Pathankot and the same was sold on August 29, 2005. The assessee claimed that since the land is an agricultural land, therefore, it does not attract any capital gains. Before the Assessing Officer, a certificate issued by the tehsildar, Pathankot, was filed to the effect that the land is at a distance of 9 kms from Pathankot and thus not a capital asset. The Assessing Officer took note of the fact that the Government of Punjab, vide notification dated November 31, 2004, extended the municipal limits of the Municipal Council, Sujanpur, up to Malikpur and that the said Municipal Council has established the octroi post at Malikpur and the land sold was situated inside the octroi post. Thus, it was said to be capital asset. The Commissioner of Income-tax (Appeals) (for short "CIT(A)") on July 14, 2011, set aside the order passed by the Assessing Officer holding that since the land is situated in the revenue limits of Pathankot, therefore, the municipal limits of Pathankot are relevant to determine whether the land is capital asset or not. It was found that the land is not within 8 kms of the Municipal Council Pathankot, thus the land is not an capital asset. Such order passed by the Commissioner of Income-tax (Appeals) was affirmed by the Income-tax Appellate Tribunal (for short "the Tribunal") on May 10, 2012. It is the said order which is dispute in the present appeals by the Revenue.

(3.) Learned counsel for the Revenue relies upon an order passed by the Division Bench of this court in CIT v. Smt. Anjana Sehgal, 2013 355 ITR 294 wherein it has been held that the land situated within the limits of 8 kms from any municipality would be a capital asset, the sale of which would attract capital gains. The court held to the following effect (page 298):--