D.V Shylendra Kumar, J.:— In this appeal under s. 260A of the IT Act, 1961 (for short, ‘the Act’) the Revenue has questioned the correctness of the order of the Tribunal, Bangalore ‘C’ Bench, Bangalore passed on 27th Feb., 2009 in ITA No. 1043.Bang/2008.
2. The assessee is an HUF and the assessment year is 2005–06. The question is as to whether the agricultural land belonging to the family sold on 2nd March, 2005 for a total consideration of Rs. 52,00,000 resulted in long-term capital gain in a sum of Rs. 48,94,784. 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 ss. 2(14)(iii)(a) and (b) of the Act.
4. Aggrieved by this order of the Tribunal, the present appeal by the Revenue.
5. Sri K.V Arvind, learned standing counsel appearing for the appellants-Revenue has vehemently urged that the Tribunal has committed a mistake in choosing to rely upon a certificate issued by Dasanapura Gram Panchayath and ignoring the factum of the village being within 8 kms., limits of Dasarahalli City Municipal Council.
6. However, it is not in dispute that the Central Government has not issued any notification in terms of s. 2(14)(iii)(b) of the Act.
7. Mr. Arvind, learned counsel for the appellants places reliance on s. 2(14)(iii)(a) of the Act to contend that proposed Dasarahalli City Municipal Council is covered under cl. (a) of the Act i.e, lands within the limits of 8 kms., from the boundary of the city municipal council etc.
8. An agricultural land in India is not a capital asset but becomes a capital asset if it is the land located under ss. 2(14)(iii)(a) and (b) of the Act. Sec. 2(14)(iii)(a) of the Act covers a situation where the subject agricultural land is located within the limits of municipal corporation, notified area committee, town area committee, town committee, or cantonment committee and which has a population of not less than 10,000.
9. Sec. 2(14)(iii)(b) of the Act covers the situation where the subject land is not only located within the distance of 8 kms., from the local limits, which is covered by cl. (a) to s. 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this clause for the purpose of including the area upto 8 kms., from the municipal limits, to render the land as a ‘capital asset’.
10. In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, cl. (a) to s. 2(14)(iii) of the Act is not attracted.
11. However, though it is contended that it is located within 8 kms., within the municipal limits of Dasarahalli City Municipal Council, in the absence of any notification issued under cl. (b) to s. 2(14)(iii) of the Act, it cannot be looked in as a capital asset within the meaning of s. 2(14)(iii)(b) of the Act also and therefore though the Tribunal may not have spelt out the reason as to why the subject land cannot be considered as a ‘capital asset’ by giving this very reason, we find the conclusion arrived at by the Tribunal is nevertheless the correct conclusion. Therefore, we find no need to interfere in this appeal.
12. Accordingly the appeal is dismissed.