If vegetable or grains croping land (agricultural land) is out of locl limit of municipal area/municipal board or a cantonment area but situated 2 kilometer far away in a village (governed by local administration called SIRPUNC) during the financial year 2006-07. it was an agricultural land or not in the same year as per provision of section 2(14)(iii)a and b of the Income tax Act, 1961 and in the judgements of hon'ble SC/HC/ITAT of India.
Prior to the amendment, notification was issued to cover such land
"in any area NOTIFIED by the Govt. outside the local limits of the municipality"
This notification was for UPTO 8KMs, so at some places it was 2 KM , some places 3 KM and some place 5KM etc etc.
You will have to see whether the notification was applicable to the land or not
The interesting thing would be that the land is situated within say 3 KM from local limits of the municipality "A" and beyond 5KM from the local limits of the municipality "B" and if the land is within 3 KM of the municipality then it is NOT a capital asset
~ if land is beyond 5KM from the local limits of municipalty "B" then its a capital asset
In such a situation we will have to see that under which jurisdiction the land records are being maintained and the nature of the asset will be determined accordingly.
Kindly mention name of city and state
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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