ITAT Delhi: No Section 69A Addition Where Buyers Pay Developer Directly Without Benefit to Assessee

April 24, 2026 : The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of an addition of ₹18.63 crore made under Section 69A of the Income Tax Act, holding that amounts directly paid by subsequent buyers to a developer cannot be treated as unexplained money in the hands of the assessee in the absence of any real benefit accruing to him.

The ruling came in ACIT v. Sachin Gaur (ITA No. 7244/Del/2025) for Assessment Year 2022–23, decided on 24 April 2026 by a Bench comprising Judicial Member Yogesh Kumar U.S. and Accountant Member Manish Agarwal.

Background

The assessee, Sachin Gaur, had booked a property—Sport Villa-17 at Jaypee Greens, Greater Noida—and received an allotment letter dated 30.03.2012 after paying ₹1.99 crore. Subsequently, an offer of possession issued on 15.02.2015 valued the property at ₹18.63 crore, leaving an outstanding balance of ₹16.64 crore.

Later, the assessee transferred his rights in the property to two buyers—Yatharth Attrey and Neena Tyagi—through an agreement dated 07.10.2021. The buyers directly paid the outstanding amount of ₹16.64 crore to the developer, and the property was transferred in their names.

Assessment and First Appeal

The Assessing Officer treated the entire amount of ₹18.63 crore as unexplained money under Section 69A, on the premise that it represented sale consideration. However, the Commissioner of Income Tax (Appeals) deleted the addition, accepting the assessee’s explanation and supporting evidence.

Tribunal’s Findings

The Tribunal affirmed the CIT(A)’s order, noting that:

• The assessee had substantiated the transaction with documentary evidence, including allotment records, agreement, and confirmations.
• Both the developer and the buyers confirmed the transaction in response to notices issued under Section 133(6).
• Crucially, the Assessing Officer failed to establish that the assessee had received or derived any benefit from the disputed amount.

The Bench observed that out of ₹18.63 crore, ₹16.64 crore was directly paid by the buyers to the developer, and therefore, it could not be said that the assessee had benefited either directly or indirectly from that amount.

Key Ruling

The Tribunal held that invoking Section 69A in such circumstances was incorrect, as the transaction was a genuine transfer of rights supported by evidence, and no unexplained money was found in the hands of the assessee.

Finding no infirmity in the CIT(A)’s order, the Tribunal dismissed the Revenue’s appeal.