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Issues:
1. Whether the Tribunal was justified in remanding the case to determine if the land was agricultural? 2. Whether the Tribunal was correct in directing the application of a specific High Court decision? 3. Whether the capital gain on the sale of lands is subject to income tax? Analysis: Issue 1: The Tribunal remanded the case to ascertain if the sold land was agricultural. The Income-tax Officer was directed to consider all relevant facts and apply specific guidelines. However, the High Court held that even if the land was agricultural but within corporation limits, it would attract capital gains tax per previous decisions. The Tribunal's remand order was deemed futile as the character of the land did not exempt it from capital gains tax, leading to the vacating of the Tribunal's order. Issue 2: The Tribunal directed the application of a Bombay High Court decision in assessing capital gains if the land was found to be agricultural. However, the High Court disagreed with this direction, emphasizing that the location within corporation limits makes the land liable to capital gains tax regardless of its agricultural nature. The High Court ruled against the assessee, supporting the Revenue's position. Issue 3: The High Court affirmed that if capital gains arose from the sale of land within municipal or corporation limits, it is subject to capital gains tax. The High Court's decision favored the Revenue, stating that even if the land was agricultural, the liability for capital gains tax remained. The High Court answered all three questions against the assessee and in favor of the Revenue, concluding that the capital gains on the sale of lands within corporation limits are indeed subject to income tax.
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