RATAN DEVI NAGAL vs. THE PRINCIPAL,COMMI.OF INCOME TAX and ANR.

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CW/3816/2017HC RajasthanRJHC01041512201730 October 20172 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of whether the agricultural land constituted a capital asset. Instead, it focused on the procedural aspect of the pending appeal. The Court directed the respondents (Income Tax Department) not to take any coercive action against the petitioners in pursuance of the demand order dated 29.08.2016, during the pendency of the appeal before the concerned authority. The Court also directed that the appeal be decided as expeditiously as possible. The specific finding on the definition of 'capital asset' was left undecided by the High Court in these writ petitions.

What were the facts?

The petitioners, Kumari Taruna Suthar and Ratan Devi Nagal, challenged a demand order dated 29.08.2016 concerning capital gains on the sale of agricultural land. The petitioners argued that their land does not qualify as a capital asset under Section 2(14) of the Income Tax Act, 1961. They contended that the land is situated beyond 6 kilometers from the local limits of the Bikaner Municipality and that the municipality's population does not exceed ten lacs, thus excluding it from the definition of a capital asset. The assessment years are not specified in the judgment. The petitions were filed before the Rajasthan High Court at Jodhpur.

What were the issues?

1. Whether the agricultural land sold by the petitioners constitutes a 'capital asset' as defined under Section 2(14) of the Income Tax Act, 1961, for the purpose of computing capital gains? Assessee's Contentions: The petitioners argued that their agricultural land is not a capital asset because it is situated beyond 6 kilometers from the Bikaner Municipality and the municipality's population does not exceed ten lacs, as stipulated in Section 2(14)(a)(iii) of the Act. They relied on the definition of 'capital asset' provided in the Income Tax Act. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the petitioners' arguments regarding the definition of a capital asset.

Which sections of the Income-tax Act were involved?

Section 2(14)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 3815 / 2017 Kumari Taruna Suthar D/o Shri Panna Lal Nagal, Aged About 26 Years, Resident of B-29, Karni Nagar, Lalgarh, Bikaner. ----Petitioner Versus 1. The Principal Commissioner of Income Tax, Income Tax Department, Bikaner. 2. Income Tax Officer Ward-2(1), Bikaner. ----Respondents Connected with S.B. Civil Writ Petition No. 3816 / 2017 Ratan Devi Nagal W/o Shri Panna Lal Nagal, Aged About 52 Years, Resident of B-29, Karni Nagar, Lalgarh, Bikaner. ----Petitioner Versus 1. The Principal Commissioner of Income Tax, Income Tax Department, Bikaner. 2. Income Tax Officer Ward-2(1), Bikaner. ----Respondents _____________________________________________________ For Petitioner(s) : Mr. Sundeep Bhandawat For Respondent(s) : Mr. K.K. Bissa _____________________________________________________ HON'BLE MS. JUSTICE NIRMALJIT KAUR Order 30/10/2017

The matter comes up on an application (APPLW No.5213/17), for early hearing of the case. The application is allowed and the matter is taken up today itself for hearing. The prayer in the present petitions is to set aside the impugned demand made vide order dated 29.08.2016 towards

(2 of 2) [CW-3815/2017] capital asset on account of the sale of agricultural land of the petitioners. While praying for the relief, learned counsel for the petitioners submitted that their land does not fall under the category of capital asset. “Capital asset” is defined under Section 2(14) of the Income Tax Act, 1961, which includes ‘Agricultural Land’ in India, but not being the land situated in any area within the distance measured aerially not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lac but not exceeding ten lacs within the asset measure. It is stated that as per measure, the land is situated beyond 6 Kms. distance of Bikaner Municipality and the population also does not exceed 10 lacs. Without going into the merit of the case but taking into account that the appeal is still pending, this Court deems it proper to direct the respondents not to take any coercive action against the petitioners in pursuance to the demand order dated 29.08.2016 during the pendency of the appeal before the authority concerned. It goes without saying that the respondents shall decide the appeal as expeditiously as possible. The writ petitions are disposed of accordingly. (NIRMALJIT KAUR), J. arvind/48-49

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