Venkata Siddi Raju Subramanyam Raju Konduru Vs ACIT (ITAT Chennai)
Summary: The Chennai Bench of the Income Tax Appellate Tribunal considered the assessee’s challenges to denial of exemption under section 10(37) of the Income-tax Act, 1961 on enhanced compensation received from the National Highways Authority of India (NHAI), and to denial of long-term capital gain treatment on sale of office premises at Raigad. The source header identifies the appeal as ITA No. 767/Chny/2026 for AY 2016-17, decided on 18.08.2026.
The record states that the assessee had originally filed a return declaring total income of Rs.49,94,600/-. The original assessment accepted the assessee’s treatment of the office-premises gain as long-term capital gain and the claim under section 10(37) concerning enhanced compensation. The Principal Commissioner subsequently exercised revisionary jurisdiction under section 263 and directed a fresh assessment. In the consequential assessment, the Assessing Officer treated the office-premises gain as short-term capital gain and denied section 10(37) exemption on the ground that documentary evidence of agricultural operations and other prescribed conditions had not been established. The CIT(A) upheld those conclusions.
On the section 10(37) issue, the assessee submitted that the amount of Rs.5,23,29,323/- received during AY 2016-17 was enhanced compensation arising from the same compulsory acquisition by NHAI for which original compensation had already been examined and accepted as exempt. The assessee relied on the earlier scrutiny proceedings, departmental enquiry, Inspector’s verification, Lok Adalat and revenue records, including Chitta and Adangal. The Department contended, among other things, that Rs.1,21,29,533/- related to survey numbers it characterised as vacant residential plots and that, for the remaining compensation of Rs.4,01,99,790/-, the Adangal allegedly showed only limited cultivation.
