Commissioner of Income Tax-III, V. Smt.T. Urmila

ITTA/297/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax against the decision of the Income Tax Appellate Tribunal (ITAT), which ruled that the land sold by Smt. T. Urmila did not constitute a 'Capital Asset' under Section 2(14)(iii) of the Income Tax Act. The primary legal questions pertained to the interpretation of what constitutes a capital asset and whether the Hyderabad Airport Development Authority (HADA) qualifies as a local body under the Act. The Tribunal's findings, which were contested by the appellant, included the characterization of the land as agricultural and the status of HADA as a non-local body. The High Court, after reviewing the Tribunal's decision, agreed with the Tribunal's conclusions and dismissed the appeal, stating that no substantial question of law was involved that required their intervention.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 737232 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 17-07-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: B SARMA
• Keywords: Agricultural Land; Capital asset; Local Body; Long Term Capital Gains; Hyderabad Airport Development Authority
• Section: 2(14)(iii)

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.297 of 2013 DATED: 17.7.2013 Between: The Commissioner of Income Tax – III, Hyderabad.. … Appellant And Smt. T.URmila, Hyderabad. …. Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE Ms. JUSTICE G. ROHINI I.T.T.A.No.297 OF 2013 Judgment: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the judgment and order of the learned Tribunal dated 12.12.2012 and is sought to be admitted on the following suggested questions of law: (i) In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that the land sold by the respondent-assessee do not come within the meaning of “Capital Asset” under Section 2(14)(iii) of the Act and the sale of the said lands cannot be considered as a transfer of capital asset, which is exigible to Long Term Capital Gains ? (ii) In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that Hyderabad Airport Development Authority (HADA) is not a local body and the subject land is not a capital asset in spite of the fact that the HADA is an authority under Government and subject land comes within the definition of capital asset under Section 2(14)(iii) of the Act ? We have heard Sri B. Narasimha Sarma, learned counsel for the appellant and have gone through the impugned judgment and order of the learned Tribunal. The learned Tribunal on fact, found that the land in question at the time of transfer did not lose the character of agricultural one. Further, it was held on fact that the Hyderabad Airport Development Authority(HADA) is not a local body. It was further held that the land in question was not a capital asset as defined under Section 2(14)(iii) of the Act. Section 2(14) (iii)(a) and (b) reads as follows: “(iii) agricultural land in India not being, land situate__ (a) In any area, which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or (b) In any area within such distance, not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanization of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette.” Hyderabad Airport Development Authority, is therefore, not a Body within the meaning of Clauses (a) and (b) of the said Section. Therefore, the learned Tribunal has held that the proceeds of sale of agricultural land do not form capital gain, as they do not relate to capital asset. We are of the view that the Tribunal has come to the correct conclusion. There is no element of law involved in this appeal, for which, decision of this Court is required. Therefore, we dismiss this appeal. ___________________ K.J. SENGUPTA, CJ _________________ G. ROHINI, J 17.07.2013 pnb "