Controversy whether Capital Gain is chargeable or not

During the F.Y. 2008-09, my client has sold Agriculture situated at Village Shaper of Rajkot District. Shaper is not comprised within the jurisdiction of municipality but local authority is Talukapanchayat and its population is more than 10000.It is more than 8 Kms. far from Rajkot. Land

Now my questions are:

1. Does this land covered within the purview of Capital Assets?

2. Does it make any difference if local authority is Gram Panchayat instead of Taluka Panchayat?

3. Which is/are the basic condition(s) for deciding agricultural land being Capital Asset or outside the definition of Capital Asset?

4. Both the conditions i.e. population of less than 10000 and far more than notified Kms should be satisfied or anyone of these?

Kindly opine elaborately with citation