Agricultural land near a municipality may still be taxable as a capital asset.
In Narayanan Sundaramahalingam Rajkumar v. ACIT, ITAT Chennai held that agricultural land falling within the prescribed population and aerial-distance limits under section 2(14)(iii)(b) is taxable as a capital asset, even if it is agricultural in revenue records.
The Tribunal also gave relief on alleged on-money by restricting the addition to the admitted cash component and deleting the uncorroborated balance addition.
This ruling is important for landowners, NRIs, developers and taxpayers selling land near urban or municipal areas.
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