Sundaramahalingam Narayanan Vs ITO (ITAT Chennai)
The appeal before the ITAT Chennai arose from the order of the Commissioner of Income Tax (Appeals) dated 16.12.2024 for Assessment Year 2012-13. The Assessing Officer (AO), while completing the assessment under Section 143(3), made three principal additions: treating ₹26,60,000 received on sale of a flat as income instead of advance, denying exemption under Section 10(37) in respect of compensation of ₹83,70,119 received on compulsory acquisition of land at Paiyanur, and taxing capital gains of ₹5,09,709 on sale of land at Poonchery by treating it as a capital asset. The CIT(A) confirmed the additions after remand from the Tribunal.
Before the Tribunal, the dispute concerned the denial of exemption under Section 10(37) and the taxability of gains from the Poonchery land. Regarding the Paiyanur land, the assessee contended that the land was agricultural as evidenced by Patta, Chitta and Adangal records, that it had been compulsorily acquired for expansion of National Highway No.49, and that compensation was received after 01.04.2004. The assessee argued that denial of exemption merely due to absence of agricultural income or reliance on statements of the Village Administrative Officer was unsustainable. It was also submitted that the character of the land should be determined from official revenue records and surrounding circumstances.
