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TMI Blog2002 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... has referred under section 256(1) of the Income-tax Act, 1961 (for short "the Act"), the following question for our opinion: "Whether, on the facts and in the circumstances of the case, capital gains arising on transfer of agricultural lands in village Nangal Dewat, Delhi, is chargeable to tax?" Since in all the references an identical question has been referred, these are being disposed of by this common order. As the format of the question itself suggests, the issue arising for consideration is whether the agricultural land in village Nangal Dewat constitutes a capital asset within the meaning of section 2(14)(iii)(a) of the Act and exigible to capital gain taxed on its transfer. The question posed being purely legal, it is unnece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular area is exigible to capital gains. It was said that the part of the sentence--"which has a population of not less than ten thousand" refers to municipality or a cantonment board and not to any area comprised in the erstwhile village or any fraction of the area constituting the municipality or cantonment board. However, it is vehemently submitted by Mr. Bansal, learned counsel for the assessee, that the aforenoted decisions of this court need reconsideration because the court has not taken into consideration a vital fact that during the relevant period, there was no notification under section 507 of the Delhi Municipal Corporation Act, 1957 (for short "the DMC Act"), declaring the rural area of the village as forming part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by notification in the Official Gazette,-- (i) exempt the rural areas or any portion thereof from such of the provisions of this Act as it deems fit, (ii) levy taxes, rates, fees and other charges in the rural areas or any portion thereof at rates lower than those at which such taxes, rates, fees and other charges are levied in the urban areas or exempt such areas or portion from any such tax, rate, fee or other charge; (c) the Corporation shall pay a Gaon Sabha- (i) an amount equal to the proceeds of the tax on profession, trades, callings and employments, as and when that tax is levied in the Gaon Sabha area, and (ii) an amount equal to such portion of the proceeds of the property taxes on lands and buildings in that area as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994] (31) DRJ 621. In that case the property was situated in the revenue estate of village Bijwasan, Tehsil Mehrauli, New Delhi, which is a rural area. The petitioner, disputing the right of the Delhi Municipal Corporation to recover tax on its property, had submitted that the building constructed on the property was being used for agricultural purposes and was not liable to be taxed also because it was situated in a rural area. Repelling the said contention, it was held that rural areas of Delhi were also part of "Delhi" as contemplated by section 2(52) of the Delhi Municipal Corporation Act. In that view of the matter, we feel that section 507 of the Delhi Municipal Corporation Act has no bearing in so far as the applicability of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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