ORDER
Gupta, J.
Are the profits and gains made by the assessee on account of sale of agricultural land exigible to the levy of income-tax under the heading Capital gains?
2. The assessing officer had disallowed the claim for exemption of the price of land made by the assessee. The order was affirmed by the Commissioner (Appeals), Chandigarh. However, the Tribunal relying upon the decision of their Lordships of the Bombay High Court in Manuhai A. Sheth v. N.D. Nirgudkar, Second ITO : [1981]128ITR87(Bom) , held that the income was not exigible to the levy of income-tax. Aggrieved by the order, the revenue filed a petition under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). The Tribunal has referred the following question for the opinion of this court :
'Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the capital gains arising from the sale of land actually put to agricultural use wherever located are not liable to tax ?'
3. Mr. R.P. Sawhney, the learned counsel for the revenue, contends that in view of the decision of this court in Tuhi Ram v. Land Acquisition Collector and that of their Lordships of the Supreme Court in Union of India v. S. Muthyam Reddy : [1999]240ITR341(SC) , the view taken by the Tribunal cannot be sustained.
4. Mr. Garg appearing for the assessee, does not controvert the position.
5. Income derived from sale of agricultural land is not agricultural income. Thus, it would be exigible to the levy of tax under the head Capital gains. Respectfully following the view taken in the aforesaid two cases, we answer the question in favour of the revenue and against the assessee.
6. In the circumstances of the case, we made no order as to costs.