Additional evidence for agricultural land exemption must be considered, with third-party material shared for rebuttal before fresh assessment.

Additional evidence supporting the claim that land sold was agricultural land and that the resulting gain was exempt from tax should be admitted where it is material to determining whether the land was a capital asset. Evidence rejected only at the threshold under Rule 46A should not be excluded when substantial justice requires consideration on merits. Any third-party or public authority material relied on against the assessee must be furnished for rebuttal. The assessee retains the burden of proving entitlement to exemption, and the matter was restored for fresh examination and de novo assessment in accordance with law.

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Issues: Whether the assessee's additional evidence should be admitted and the matter restored for fresh adjudication on the claim that the land sold was agricultural land and the resulting gain was exempt from tax.

Analysis: The additional documents filed before the appellate authority were material to the assessee's claim that the land was agricultural and had been used for agricultural purposes. They were not examined on merits because they were rejected at the threshold under Rule 46A of the Income-tax Rules, 1962. The Tribunal held that such evidence ought to be admitted in the interest of substantial justice, especially where the documents could materially affect the determination of whether the land was a capital asset and whether the gain was taxable. It also directed that any material collected by the Assessing Officer from third parties or public authorities and relied upon against the assessee must be furnished to the assessee for rebuttal. The Tribunal emphasized that the assessee bears the burden to establish entitlement to exemption and that the matter required fresh examination on evidence.

Conclusion: The additional evidence was directed to be admitted and the matter was restored to the Assessing Officer for de novo assessment on merits in accordance with law.

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