|COURT:||Delhi High Court|
|CORAM:||S. Muralidhar J, Vibhu Bakhru J|
|CATCH WORDS:||capital gains, long-term capital asset|
|DATE:||September 14, 2015 (Date of pronouncement)|
|DATE:||September 28, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 2(14)(iii)(b): To determine whether the “agricultural land” is situated within 8 km of the municipal limits so as to constitute a “capital asset”, the distance has to be measured in terms of the approach road and not by the straight line distance on horizontal plane or as per crow's flight|
(i) The presumption of the Assessing Officer as well as CIT(A) that the ‘area’ means the village in which such land is situated is without any basis. In fact, the correct interpretation of the word ‘in any area within such distance not being more than 8 Kms. from the local limits of any municipality’ would mean the land should be within such area which is not more than 8 Kms. from the local limit of the municipality.
(ii) The Court is of the view that for the purposes of Section 2 (14) (iii) (b) of the Income-tax Act, the distance had to be measured from the agricultural land in question to the outer limit of the municipality by road and not by the straight line or the aerial route. The distance has to be measured from the land in question itself and not from the village in which the land is situated.