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Issues involved: Interpretation of the definition of "Capital Asset" under Section 2(14)(iii) of the Act and the classification of land sold by the respondent-assessee as a capital asset.
Summary: The appeal was filed against the Tribunal's judgment regarding the classification of the land sold by the respondent-assessee as a capital asset. The questions of law raised were whether the land sold qualifies as a "Capital Asset" under Section 2(14)(iii) of the Act and whether the Hyderabad Airport Development Authority (HADA) should be considered a local body. The Tribunal found that at the time of transfer, the land in question retained its agricultural character and that HADA is not a local body. It was also determined that the land did not meet the definition of a capital asset under Section 2(14)(iii) of the Act. The relevant section, 2(14)(iii)(a) and (b), specifies conditions for agricultural land not being classified as a capital asset. Since HADA does not fall under the criteria outlined in the section, the Tribunal correctly concluded that the proceeds from the sale of agricultural land do not constitute capital gains. The Court agreed with the Tribunal's decision, stating that there was no legal issue requiring further consideration. Consequently, the appeal was dismissed.
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