1997 (9) TMI 45

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..... r Bench, Amritsar (for short "the Tribunal"), has referred the following question of law to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in upholding the decision of the Appellate Assistant Commissioner that capital gains arising from transfer of agricultural land located within the municipal limits is .....

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..... ale made of certain specified agricultural lands situated in the municipal limits would attract capital gains. It was held as under (reproduced from the headnote) : "Compulsory acquisition of agricultural land under any law for the time being in force is a transfer within the meaning of section 2(47) of the Income-tax Act, 1961. The expression 'capital asset' means property of any kind held by t .....

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..... is the source of income, income is derived not by the use of land, but by the sale of the land, that is, by conversion of the land into cash. The resultant income is not agricultural income. The Explanation inserted in section 2(1A) by the Finance Act, 1989, with effect from April 1, 1970, makes the position clear when it declares that revenue derived from land shall not include and shall be deeme .....

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