- (1.) This order will dispose of I.T.As. Nos. 276 of 2004, 54 of 2005 and 448 of 2009 as it is stated by the learned counsel for the Revenue that the facts and law involved in these appeals are common. However, the facts are taken from I.T.A. No. 276 of 2004. I.T.A. No. 276 of 2004 has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") against order dated April 19, 2004, passed by the Income-tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh, in I.T.A. No. 135/Chandi/2001, for the assessment year 1997-98, claiming the following substantial questions of law: (i) Whether the Income-tax Appellate Tribunal was right in law in holding that the impugned agricultural land does not come within the definition 'capital asset' as defined under section 2(14) of the Income-tax Act, 1961, because the land in question is situated in the State of Punjab and beyond 8 kilometers of the municipal limits of Rajpura even when the impugned land is also situated within a distance of 5 kilometers of the municipal limits of Panchkula, District Ambala (Haryana)? (ii) Whether the expression 'from the local limits of any municipality' used in section 2(14)(iii)(b) of the Income-tax Act denotes 'any municipality or municipality of the district in which the land is situated'?
(2.) The assessee sold agricultural land and was sought to be taxed for the capital gains on the ground that agricultural land in question was covered by the definition of "capital asset" under section 2(14) of the Act. The land was situated within 8 kilometers of the municipal limits of Panchkula and was thus covered by the notification dated January 6, 1994, contemplated under section 2(14)(iii)(b). On appeal, the Commissioner of Income-tax (Appeals) deleted the addition holding that the land in question was in the State of Punjab while the Panchkula municipality was in the State of Haryana and even if the land was within the specified distance of municipality in the State of Haryana, the same could not be treated to be capital asset when the land was not in that State. The Tribunal upheld the said view.
(3.) We have heard learned counsel for the parties.;