IN INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. No. 16/HYD/2016 Assessment Year: 2011-12 Smt. P. Sobha, Income Tax Officer, L/R of Late P. Sudarshan Vs Ward-11(3), Reddy, HYDERABAD HYDERABAD [PAN: BPNPP3869M] (Appellant) (Respondent) For Assessee : Shri V. Siva Kumar, AR For Revenue : Smt U. Minichandran, DR Date of Hearing : 07-09-2016 Date of Pronouncement : 14-09-2016 ORDER This is appeal by Assessee against order of Commissioner of Income Tax (Appeals)-5, Hyderabad dated 30-10-2015 on issue of claim u/s. 10(37) as well as u/s 54F of Income Tax Act [Act] which was not considered. 2. facts leading to present appeal are that, Shri Sudarshan Reddy Pannala was having some land which was acquired by Central Government for purpose of Defence Research and Development Laboratory [DRDL] through Govt. of AP. He has received compensation amount of Rs. 51,67,410/-. Shri Sudarshan Reddy expired on 31-12-2012 and his wife Smt. Shoba filed return of income in capacity of legal representative on 28-03-2013 disclosing compensation amount received. :- 2 -: I.T.A. No. 16/Hyd/2016 Assessee claimed exemption u/s. 54F in construction of new house at Pool Bagh Colony, Ferozguda, Kukatpally. Assessing Officer (AO) in scrutiny assessment however, did not take on record Smt. Shoba as legal representative, but assessment was completed in name of Shri Sudarshan Reddy, even though he expired even before return of income was filed. Be that as it may, assessee s claim u/s. 54F was denied on reason that assessee did not furnish any evidence of having invested money in constructing house. He also noted that land on which building was supposed to be constructed was purchased prior to 2001 and municipal permission was also of earlier date, not relevant for claim u/s. 54F during year. He determined Long Term Capital Gains at Rs. 36,31,769/- and levied taxes accordingly. 3. Before Ld. CIT(A), assessee s legal representative made claim u/s. 10(37) indicating that land acquired by Government was agricultural land and agricultural operations were being carried out hence, exempt u/s. 10(37) of Act. However, since assessee could not furnish any evidence, by extracting part of appropriate authority s order, Ld. CIT(A) gave finding that area is coming under Grater Hyderabad Municipal Corporation limits and it cannot be treated as agricultural land . 4. Ld. Counsel referring to order of acquisition by Land Acquisition Authority submitted that Ld. CIT(A) has only extracted part of order, but there is record that there was agricultural well, pump house, cattle shed, tamarind tree and Mango tree and no building. In addition to that, Ld. Counsel also placed additional :- 3 -: I.T.A. No. 16/Hyd/2016 evidence which could not be furnished before AO in form of Patta Pass Book of Shri P. Pentaiah, father of assessee and also letter from Deputy Collector and Tahsildar, Saroor Nagar (M), R.R. District, confirming that lands were agricultural in nature. This letter was addressed to ITO, Ward-9(3), Hyderabad on reference made by AO in another case of Shree Veera Reddy and Yadi Reddy, who are co-owners in entire land acquired by Government for DRDL. This information, since could not be furnished before authorities, has been submitted with prayer for admission of additional evidence. It was submission that assessee also prayed for more time for furnishing evidence before CIT(A), but Ld. CIT(A) decided issue without giving any further opportunity. It was submitted that assessee was prevented in submitting necessary details as she was filing return in her representative capacity and was not fully conversant with matters of her husband. It was requested that if another opportunity is given before AO, claims can be examined afresh. 5. Ld. DR however, relied on orders of AO and fairly admitted that additional evidence required to be verified by AO. 6. After considering rival contentions, I am of opinion that AO did not give adequate opportunity to assessee to submit necessary details. In fact, his order do indicate that he was constrained for time as he has recorded It was informed that no further opportunity will be given being time barring matter & assessment will be completed accordingly as per show cause :- 4 -: I.T.A. No. 16/Hyd/2016 notice issued . This indicates that AO was constrained by time barring nature of assessment and assessee also contested same before Ld. CIT(A). Moreover, as seen from order, AO did not take legal representative on record and assessment was completed in name of deceased Shri Sudarshan Reddy. Ld. CIT(A) also has decided issue without examining contentions and vide letter dt. 29-10-2015, assessee particularly asked for time, in representation made before CIT(A). Since new evidence has been furnished before me in form of additional evidence, in interest of justice, I am of opinion that matters require re-examination by AO. AO is directed to examine claim u/s. 10(37) and if that is not acceptable, claim u/s. 54F if allowable. AO is also directed to keep in mind findings given in other co-owners cases in which it was submitted that exemption u/s. 10(37) was allowed and no proceedings were initiated. With these directions, issues of claim u/s. 10(37) and alternately u/s 54F are restored to file of AO. Assessee should be given due opportunity to furnish necessary evidence in support of claims. grounds are allowed for statistical purposes. 7. In result, appeal of assessee is allowed for statistical purposes. Order pronounced in open Court on 14th September, 2016 Sd/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER Hyderabad, Dated 14th September, 2016 TNMM :- 5 -: I.T.A. No. 16/Hyd/2016 Copy to : 1. Smt. P. Sobha, L/R. of Late P. Sudarshan Reddy, H.No. 7-1-21/19/1, Phool Bagh Colony, Ferozguda, Kukatpally, Hyderabad. 2. Income Tax Officer, Ward-11(3), Hyderabad. 3. Commissioner of Income Tax(Appeals)-5, Hyderabad 4. Pr. Commissioner of Income Tax-5, Hyderabad. 5. D.R. ITAT, Hyderabad. 6. Guard File. P. Sobha v. Income-tax Officer, Ward-11(3), Hyderabad