S.69 cash part of flat price sustained where the paper trail contradicts itself (ITAT Hyderabad)
The assessee's case was that joint family accounts funded the price, with Rs.62.57 lakhs withdrawn between December 2008 and May 2013 and Rs.44 lakhs paid to the vendor since 2008, receipts being unavailable because the vendor, allegedly double-selling the property, was absconding — supported by the
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Order: ITA No. 626/Hyd/2025 (ITAT Hyderabad), Assessment Year 2016-17, pronounced 20.08.2025.
Facts
The assessee, a non-resident who filed no return for the year, had purchased a Bangalore flat for Rs.71 lakhs by sale deed dated 07.07.2015 on which tax was deducted at source; the Assessing Officer reopened by notice under section 148 dated 28.03.2023.
The assessment added the full Rs.71 lakhs as unexplained investment under section 69 read with section 115BB; on remand the Commissioner (Appeals) accepted Rs.27 lakhs paid through banking channel and confirmed Rs.44 lakhs claimed in cash.
Issue
Whether the Rs.44 lakhs cash component stands explained by old family withdrawals and an absconding vendor, or fails on internal contradictions.
Holding
The assessee's case was that joint family accounts funded the price, with Rs.62.57 lakhs withdrawn between December 2008 and May 2013 and Rs.44 lakhs paid to the vendor since 2008, receipts being unavailable because the vendor, allegedly double-selling the property, was absconding — supported by the vendor's undertaking and unpresented post-dated cheques.
The Revenue answered that the agreement dated 08.05.2013 recited Rs.70 lakhs received that day while Rs.27 lakhs moved only in July 2015, making the unregistered agreement doubtful, and that pre-2012 payments were impossible before the April 2012 demarcation gave the developer anything to sell.
The Tribunal held the Rs.27 lakhs cheques proved, the Rs.44 lakhs source unexplained, the agreement's receipt recital contradicted by the cheques, and pre-demarcation payments unacceptable — finding no error in the Commissioner (Appeals)'s order and upholding it.
The appeal was dismissed and the order pronounced on 20.08.2025.
Why a client would care
Banking-channel proof saves the traceable part, but the cash part must cohere with the agreement dates — a receipt recital the cheques contradict, and payments claimed before the seller owned anything sellable, sink the explanation.
Questions clients ask
Q1. The Rs.44 lakh cash component was explained by old family withdrawals and an absconding vendor. Did that explanation hold?
No — the Tribunal found the source of the Rs.44 lakhs unexplained and the agreement’s receipt recital contradicted by the cheques.
Q2. Which part of the payment did survive?
The Rs.27 lakhs moved by cheque were held proved.
Q3. Why were the pre-2012 payments rejected?
The April 2012 demarcation left the developer nothing to sell before it, so earlier payments were unacceptable.
Disclaimer
This note summarises a Tribunal order for general information. It is not professional advice and does not predict the outcome of any other case. Tax and company-law positions depend on facts and dates; take a written opinion before you act. Harun Raaj & Associates is a Chartered Accountants firm in Visakhapatnam.
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