ITAT Delhi Upholds Deletion Of ₹18.63 Crore, Says Direct Payment To Developer Not Unexplained Cash

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 24 April upheld the deletion of an addition of Rs. 18.63 crore made against Sachin Gaur, an individual taxpayer, and held that payments made directly by subsequent buyers to a developer cannot be treated as unexplained money of the seller under Section 69A of the Income Tax Act.

A Bench comprising Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal held:

“It is observed that while making the said addition A.O. failed to establish that the Assessee has been benefitted to the tune of Rs. 18,63,37,342/- in the said transaction.”

Sachin Gaur booked a property, Sport Villa-17 at Jaypee Greens, Greater Noida, and received an allotment letter on 30 March 2012 after paying Rs. 1.99 crore to the developer. In February 2015, the developer issued an offer of possession and fixed the total consideration at Rs. 18.63 crore, leaving Rs. 16.64 crore payable.

Gaur later transferred his rights in the property to Yatharth Attrey and Neena Tyagi under an agreement dated 7 October 2021. The buyers paid Rs. 16.64 crore directly to the developer, and the developer transferred the property in their names.

The Tribunal recorded that “out of Rs. 18,63,37,342/- an amount of Rs. 16,64,37,342/- was directly paid to developers by the new buyers. Hence it cannot be said that appellant has benefitted directly or indirectly by the said amount.”

The Assessing Officer still treated the entire Rs. 18.63 crore as unexplained money under Section 69A, which deals with unexplained ownership of money or valuables not recorded in books of account.

The Tribunal rejected this view. It held that the department failed to show that Gaur received or benefited from the disputed amount. It also noted that responses under Section 133(6) from the developer and buyers supported the transaction with documentary evidence.

Finding no contrary material, the Tribunal held that the transaction remained genuine and that the Assessing Officer wrongly invoked Section 69A.

Accordingly, the ITAT dismissed the Revenue's appeal and upheld the deletion of the addition.