2011 (9) TMI 1057 - AT - Income Tax

Summary

Issues involved:
The judgment involves the issue of whether agricultural lands sold by the assessees are considered "Capital asset" u/s 2(14)(iii) of the Act.

Comprehensive details:

Issue 1: Classification of agricultural lands as "Capital asset"
The assessees sold agricultural land located beyond 8 Kms from the limits of Visakhapatnam Municipal Corporation. The Assessing Officer categorized the lands as capital assets due to their proximity to the enlarged Greater Visakhapatnam Municipal Corporation. However, the assessees claimed that the lands do not fall under the definition of capital asset as per the notification issued by the Central Government. The learned CIT (A) allowed the appeals based on a previous decision by Hon'ble ITAT Visakhapatnam, stating that without the required notification, the land cannot be considered a capital asset. The ITAT upheld the CIT (A)'s decision, emphasizing that the land in question is rural agricultural land and does not meet the criteria of a capital asset as per section 2(14)(iii) of the Act.

Conclusion:
The appeals of the Revenue were dismissed by the ITAT based on the precedent set by the previous decision, affirming that the agricultural lands in question do not qualify as capital assets under section 2(14)(iii) of the Act.