Section 69A Addition Quashed Where Property Payment Was Deferred & Paid Subsequently

G K Properties Private Limited Vs ITO (ITAT Hyderabad)

Outstanding Property Consideration Subsequently Paid Cannot Be Treated as Unexplained Money u/s 69A

The Hyderabad Bench (SMC) of the ITAT allowed the assessee’s appeal for AY 2020-21 and deleted the addition of ₹20 lakh made under section 69A. The Assessing Officer had treated the outstanding balance shown in the balance sheet towards purchase of two immovable properties as unexplained money, relying solely on the recital in the sale deeds that full consideration had been received by the seller.

The Tribunal observed that although the sale deeds mentioned receipt of full consideration, they did not specify the mode or particulars of payment. The assessee substantiated its claim that ₹20 lakh (₹10 lakh per property) was deferred by mutual arrangement and subsequently paid through banking channels, supported by bank statements and TDS challans evidencing deduction and payment of TDS on the entire consideration. Once the subsequent payment and corresponding TDS were established on record, the outstanding liability reflected in the books was held to be genuine. The addition under section 69A, based merely on suspicion and ignoring documentary evidence, was therefore unsustainable and rightly deleted. The appeal was accordingly allowed.

FULL TEXT OF THE ORDER OF ITAT HYDERABAD

This appeal has been filed by the Assessee against the Order dated 16.07.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2020-2021.

2. The assessee has raised the following grounds:

1. “The order passed by the Learned Commissioner of Income Tax Appeals is against the facts and circumstances of the appellant’s case and is contrary to the provisions of Income-tax Act, 1961.

2. Ground 1 is general in nature and do not require adjudication.

3. In the facts and circumstances of the appellant’s case the provisions of Section 69A are not applicable. Hence, the addition is liable to be deleted.

4. The Learned Commissioner of Income Tax Appeals has erred in treating Rs.20,00,000/- as unexplained money u/s. 69A of the Income Tax Act, 1961 which was paid towards outstanding amount on account of purchase of property. This addition is liable to be deleted.”

5. The learned Commissioner of Income Tax Appeals erred in invoking the provisions u/s. 69A, while the transaction is duly explained and accounted, recorded, disclosed and declared in books of account and consequently the additions made on this count are liable to be deleted.

3. The learned Authorised Representative of the Assessee has submitted that the assessee is dealing in the real estate. The assessee filed its return of income on 09.01.2021 declaring total income/loss of Rs.(-)9,62,037/-. The Assessing Officer while passing the scrutiny assessment u/sec.143(3) of the Income Tax Act [in short “the Act”], 1961 dated 28.09.2022 has made an addition of Rs.20 lakhs as income received from unexplained source. The learned Authorised Representative of the Assessee has submitted that the Assessing Officer has made this addition based on the outstanding amount of Rs.20 lakhs shown by the assessee in the balance-sheet as on 31.03.2020 towards the purchase of two properties for a consideration of Rs.1,79,22,500/- each totaling to Rs.3,58,45,000/-. The Assessing Officer has treated the outstanding shown in the balance-sheet towards the sale consideration as not acceptable when it is stated in the sale deed that the payment of the entire consideration has been paid and received by the seller. The learned Authorised Representative of the Assessee has submitted that it was an arrangement between the parties for deferment of the said payment of Rs.20 lakhs [Rs.10 lakhs each] for purchase of these two properties and the same was subsequently paid as per the bank account statement placed at page-78 of the paper book. The learned Authorised Representative of the Assessee has also referred to the TDS deducted by the assessee and paid on 31.12.2020 placed at page-79 of the paper book and submitted that once the assessee has paid the outstanding amount in the subsequent year and also paid the TDS along with late fees and interest, then the said addition made by the Assessing Officer is contrary to the record and facts.

4. On the other hand, the learned DR has submitted that as per the sale deed the parties have stated that the total consideration has been paid by the assessee and the receipt of the same is acknowledged by the seller. Therefore, the outstanding of Rs.20 lakhs claimed by the assessee is not acceptable which is contrary to the facts recorded in the sale deed. She has relied upon the Orders of the authorities below.

5. Having considered the rival submissions and careful perusal of the record, it is noted that the Assessing Officer has made the addition of Rs.20 lakhs shown by the assessee as outstanding towards the purchase of the two properties vide two Sale Deeds both dated 30.01.2020 for a consideration of Rs.1,79,22,500 each. Though in the recitals of the Sale Deeds it is stated that the vendor admits and acknowledge the receipt of the entire sale amount, however, there is no particulars and mode of payment mentioned in the sale deeds. The assessee has produced the copy of the bank account statement at page-78 of the paper book as well as the TDS challan at page^–79 of the paper book reproduced as under:

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5.1. Thus, it is clear that the assessee has made the balance amount of the consideration after deducting TDS. It is also a matter of record that the TDS was also paid by the assessee vide challan dated 31.01.2020 which matches with he total consideration paid by the assessee in respect of the two properties in question. Accordingly, by considering the fact of subsequent payment made by the assessee as well as the TDS deduction and payment along with interest and late fee, I am of the considered view that the outstanding shown by the assessee is based on the actual facts which is established with supporting evidence of subsequent payment through banking channel along with TDS deducted and paid. Hence, the addition made by the Assessing Officer based on suspicion that the assessee has already paid this amount at the time of sale deed and showing the outstanding in the balance-sheet is nothing but represents income from unexplained source is not sustainable and the same is deleted.

6. In the result, appeal of the Assessee is allowed.

Order pronounced in the open Court on 23.01.2026.