Smt. Thilagavathi Sivaprakasam Vs ITO (ITAT Chennai)
Cash Received at Time of Property Registration Not Hit by Sec.269SS – Penalty u/s 271D Deleted
The assessee sold an immovable property for ₹45 lakh, out of which ₹35 lakh was received through banking channel and ₹10 lakh in cash on the date of registration of the sale deed. The Assessing Officer treated the cash receipt as a violation of section 269SS and levied penalty of ₹10 lakh u/s 271D, which was confirmed by the CIT(A).
Before the Tribunal, the assessee explained that the property was sold under distress circumstances due to medical exigency, and the transaction was genuine. It was further argued that section 269SS applies to loans, deposits, or advances relating to immovable property, and not to final sale consideration received at the time of execution of the registered sale deed.
The ITAT observed that:
- The ₹10 lakh cash was received only at the time of registration of the sale deed, along with the balance amount through banking channel.
- There was no advance or loan received prior to the sale transaction.
- The legislative intent behind section 269SS amendment was to curb cash advances in property transactions, not the final consideration received at registration.
Relying on the earlier decision in ITO v. R. Dhinagharan (HUF), the Tribunal held that receipt of cash as part of sale consideration at the time of registration does not violate section 269SS
FULL TEXT OF THE ORDER OF ITAT CHENNAI
