KRISHNA KISHORE REDDY MANYAM ,HYDERABAD vs. INCOME TAX OFFICER, WARD-6(4) , HYDERABAD

ITA 58/HYD/2020Status: DisposedITAT Hyderabad02 June 2025AY 2008-0941 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the issue regarding whether the agricultural land was a capital asset under Section 2(14) required further verification of the distance of the land from the GHMC municipal limits on the date of sale. The AO was directed to verify this distance. If the land was within the 8 km limit, the CIT(A)'s view that it was a capital asset under Section 2(14)(iii)(b) would be approved. Regarding the Section 54F exemption for the new house, the Tribunal found no infirmity in the CIT(A)'s allowance of Rs. 1.62 crore based on documentary evidence. However, it disagreed with the CIT(A)'s restriction of investment to the 'due date' for filing the return, stating that investment up to the date of filing a delayed return under Section 139(4) is permissible, citing judicial precedents. The AO was directed to allow investment made up to the date of filing the delayed return. For Section 54B exemption, the Tribunal upheld the CIT(A)'s restriction of the claim to Rs. 1,01,07,115/-, considering the value in registered sale deeds. The claim for indexed cost of improvement of Rs. 82,50,632/- was denied as the assessee failed to provide substantiating material, relying only on rough notebook notings. The Tribunal upheld the CIT(A)'s order on this issue. The appeal was partly allowed for statistical purposes.

What were the facts?

The assessee, Krishna Kishore Reddy Manyam, filed an appeal against the order of the Commissioner of Income-Tax (Appeals), Hyderabad, for Assessment Year 2008-09. The appeal arose from an order passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961. The assessee had declared income in his revised return, including Long Term Capital Gain (LTCG) from the sale of agricultural lands at Manchirevula village, within Rajendranagar Municipality. The assessee claimed exemptions under Section 54B and Section 54F. The AO disallowed certain claims for expenditure and exemptions, and determined the LTCG. The assessee argued that the land was agricultural and not a capital asset, and also disputed the disallowance of expenditure and the restriction of exemptions.

What were the issues?

1. Whether the agricultural land sold was a capital asset under Section 2(14) of the Income Tax Act, 1961, considering it was agricultural land and its location relative to municipal limits. - Assessee's contention: The land was agricultural and not a capital asset, especially as Rajendranagar Municipality was not a notified municipality for the purpose of Section 2(14)(iii)(a), and the land was outside the 8 km limit from the municipal limits of twin cities, citing Srinivas Pandit (HUF) Vs. ITO. - Revenue's contention: The land was a capital asset as it fell within the Greater Hyderabad Municipal Corporation (GHMC) limits due to a notification dated 16.04.2007, making it urban land under Section 2(14)(iii)(a). 2. Whether the assessee was entitled to claim exemption under Section 54F of the Act for the investment in a residential house, and if so, to what extent. - Assessee's contention: The CIT(A) erred in restricting the claim under Section 54F and should have allowed the entire claim of Rs. 2,53,56,201/-, or at least the reworked amount of Rs. 1,62,00,000/-, and should have allowed the claim rejected by the AO. - Revenue's contention: Not recorded. 3. Whether the assessee was entitled to claim exemption under Section 54B of the Act for the investment in agricultural lands, and if so, to what extent. - Assessee's contention: The CIT(A) ought to have allowed the entire claim of Rs. 3,14,19,300/- under Section 54B, and was not justified in restricting it to Rs. 1,01,07,115/-. - Revenue's contention: Not recorded. 4. Whether the assessee was entitled to a further claim of expenditure towards the cost of acquisition (indexed cost of acquisition) of Rs. 70,17,970/- while calculating long-term capital gain. - Assessee's contention: The CIT(A) ought to have directed the AO to allow this claim. - Revenue's contention: Not recorded. 5. Whether the assessee was entitled to a claim for deduction of expenditure towards improvement of the subject land (commission and indexed cost of development).

Which sections of the Income-tax Act were involved?

Section 2(14),Section 143(3),Section 139,Section 139(4),Section 54B,Section 54F

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, Hyderabad ‘B‘Bench, Hyderabad

Shri K.C. Devdas, C.A.

Dr. Sachin Kumar, Sr.D.R 24.04.2025 02.06.2025 प्रति रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), Hyderabad – 10, dated 24.10.2019, which in turn arises from the order passed by the A.O. under Section 143(3) of the Income Tax Act, 1961 (for short, “the Act”) dated 29.12.2010 for A.Y. 2008-09.

The assessee has assailed the impugned

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 2(14)

All 1,130 judgments and leading authorities on Section 2(14) →

Recent GST High Court judgments

Search GST case law →