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CAPITAL GAIN- MUNICIPAL LIMIT

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This query is : Resolved

DHIRAJ DINESHKUMAR MANDOT (Querist)

17 November 2010 SIR,
ONE OF MY CLIENT HAS SOLD HIS AGRICULTURE LAND IN F.Y.2007-2008. NOW HE RECEIVED THE NOTICE FROM INCOME TAX DEPARTMENT SAYING THAT THE AGRICULTURE LAND SOLD IS WITHIN MUNICIPAL LIMIT OF NAGPUR. WE WANT TO KNOW THAT FOR THE PURPOSE OF INCOME TAX, FROM WHERE WE SHOULD COUNT THE 8 KM. FOR CAPITAL GAIN TAX PURPOSE. IF POSSIBLE, PLEASE GIVE THE REFERENCE OF ANY CIRCULAR/CASE LAW ETC.
THANKS IN ADVANCE.

Kuldeep Verma

Kuldeep Verma (Expert)

19 November 2010 Distance for municipal limits of city [or purpose of section 2(14)(iii)] has to be taken in terms of approach by road and not as per straight line distance on a horizontal plane- If principle of measurement of distance is considered straight line distance on horizontal plane or as per crow’s flight then it would have no relationship with the statutory requirement of keeping in view the extent of urbanization.

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