Case Law Details
Brief of the Case
Bombay High court held In the case of The CIT vs. Nitish Rameshchandra Chordia & others. that amendments in the statute unless a different legislative intention is clearly expressed, shall operate prospectively. Any consideration received out of sale of the agricultural land cannot be treated as Short Term Capital Gain for the purpose of income tax. For the period prior to Assessment Year 2014-15 the distance between the municipal limits and assessed property/asset is to be measured having regard to approach road distance and not as per aerial distance.
Facts of the Case
A search and seizure operation was conducted under Section 132 of the Income Tax Act, 1961 and several books of accounts and documents were seized. Notice under Section 142(1) of the Act was issued along with detailed questionnaire seeking in explanation and details from the assessee on specific seizure materials. Profits claimed as exempt on the ground that the land sold was agricultural land and not a capital asset according to Section 2(14) of the Act as it was situated beyond 8 kms from the municipality limits. The claim was rejected on the ground that the distance must be measured by shortest distance as per “the crows flight or straight line method” and not by the road distance.
Contention of the Assessee
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Good clarification about the ambiguity on the subject matter:
Bombay High court held In the case of The CIT vs. Nitish Rameshchandra Chordia & others. that amendments in the statute unless a different legislative intention is clearly expressed, shall operate prospectively. Any consideration received out of sale of the agricultural land cannot be treated as Short Term Capital Gain for the purpose of income tax. For the period prior to Assessment Year 2014-15 the distance between the municipal limits and assessed property/asset is to be measured having regard to approach road distance and not as per aerial distance