DCIT Vs Ivar Estates Private Limited (ITAT Chennai)
Can a Flat’s Lower Selling Price Be Treated as Cash Received? Chennai ITAT Says Evidence Must Come First
A discount or a price difference in a builder’s records may justify enquiry. It does not, without evidence of payment, prove that the builder received the difference in cash. The Chennai Bench of the ITAT has applied this distinction in a consolidated order concerning Ivar Estates Private Limited and Appaswamy Real Estates Limited, dismissing nine Revenue appeals over alleged unaccounted receipts from the sale of flats.
The decision is DCIT v. Ivar Estates Pvt. Ltd. and Appaswamy Real Estates Ltd., ITA Nos. 2984, 2985, 3368, 3041, 2838, 4297, 4298, 4299 and 4300/Chny/2026, pronounced on 28 September 2026. The disputed assessments covered different years from AY 2017–18 to AY 2023–24. The CIT(A) had deleted the additions, and the Tribunal upheld those deletions.
What the search revealed
A search of the Appaswamy group took place on 3 November 2023. The Department found loose sheets, electronic records and WhatsApp conversations involving sales personnel. Statements were also recorded from employees, some of whom spoke of cash collections from customers and subsequent changes to prices in the group’s Build Super Fast ERP system.
