Narsinga Rao Aleti Vs ITO (ITAT Hyderabad)
Hyderabad ITAT: Buyer’s Denial Alone Cannot Justify Section 69A Addition-AO Must Properly Verify Sale Agreement and Evidence
The Hyderabad ITAT held that an addition under section 69A cannot be sustained merely because the purchaser denies having paid consideration over and above the amount recorded in the sale deed. Where the assessee produces a duly executed sale agreement, supported by corroborative evidence such as bank entries, matching signatures, and admitted advance payments, the Assessing Officer is duty-bound to conduct a proper enquiry before rejecting the explanation.
In the present case, the assessee explained that the deposits of ₹59.76 lakh represented part of the sale consideration received for agricultural land under an agreement dated 11.08.2015, which recorded a total consideration of ₹1.65 crore, although the registered sale deed reflected only ₹46.75 lakh. The agreement contained detailed particulars of the property, sale price, payment schedule, and an RTGS token advance of ₹8 lakh, which was admitted by the purchaser and matched the assessee’s bank statement. The agreement also recorded a further payment of ₹30 lakh, which corresponded with deposits in the assessee’s bank account.
The Tribunal observed that although the purchaser, in response to a notice under section 133(6), denied making any cash payment beyond the registered sale consideration, it did not dispute the execution of the sale agreement, and the admitted RTGS payment, matching signatures, and corresponding bank entries lent credibility to the assessee’s explanation. In such circumstances, the Assessing Officer could not simply prefer the purchaser’s self-serving denial without investigating the genuineness of the agreement and the surrounding evidence. Since contradictory stands had been taken by the parties, a comprehensive enquiry was necessary before drawing any adverse inference. The matter was therefore remanded to the Assessing Officer for fresh verification and adjudication after granting the assessee adequate opportunity of hearing.
Cases Discussed:
- Narsinga Rao Aleti, Nalgonda vs. ITO, Ward-1, Suryapet in ITA.No.1265/Hyd./2024, dated 01.01.2025.
- Jignesh Harshadbhai Patel, Ahmedabad vs. ITO, Ward-4(2)(3), Ahmedabad in ITA.No.1655/Ahd./2025, dated 15.05.2026.
- Mariamma Kurian, Bhopal vs. ITO-1(1), Bhopal in ITA.No.2/Ind./2025, dated 28.08.2025.
- ACIT, Central Circle-16, New Delhi vs. Kamlesh Kumar Rathi, New Delhi in ITA.Nos.822 & 823/Del./2018, dated 16.05.2023.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
