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Section 45 read with section 2(14) of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1982-83 - Whether in view of retrospective amendment of section 2(14), consideration received on sale of urban agricultural land not exigible to capital gains tax under the Act - Held, yes FACTS In the relevant assessment year 1982-83, the assessee sold 77.649 cents of land in a certain village. He pleaded that the entire property was agricultural land and so, no capital, gains tax was exigible. The ITO declined to accept said plea. The capital gains on the sale of the property was brought to tax. In appeal, the AAC upheld the said assessment. In further appeal by the assessee, the Tribunal held that the assessee was not liable to be taxed on the capital gains arising out of the sale of the agricultural lands in question. On reference : HELD A Division Bench of this court in CIT v. T.K. Sarala Devi [1987] 167 ITR 136 dissented from the decision of the Bombay High Court and held that capital gains tax was exigible on the sale of agricultural lands. Further in the decisions of CIT v. Glory Paul [1990] 186 ITR 496 (Ker.), the amendment made by section 3 of the Finance Act. 1989, to section 2(14) was noticed, by which retrospective effect was given to the amendment. The amendment made it clear that capital gains on the sale of agricultural lands is exigible to tax. In the light of the above Bench decision of this court, as also the amendment referred to above, it was held that the Tribunal was in error in holding that the consideration received on the sale of urban agricultural lands was not exigible to capital gains tax under the Act. Note: The case decided against the assessee. CASES REFERRED TO CIT v. T.K. Sarala Devi [1987] 167 ITR 136 (Ker.), CIT v. Glory Paul [1990] 186 ITR 496 (Ker.), CIT v. A.S. Iqbat [1990] 186 ITR 499 (Ker.), CIT v. Muledath Mohammed [1990] 186 ITR 498 (Ker.) and Manubhai A. Sheth v. N.D. Nirgudkar [1981] 128 ITR 87(Bom.). P.K. Ravindranatha Menon and N.R.K. Nair for the Applicant. JUDGMENT K.S. Paripoornan, J.-At the instance of the Revenue, the Income-tax Appellate Tribunal (in short, "the Tribunal") has referred the…

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