Sham Lal vs DCIT, ITA No. 950/Del/2020
In a big win for taxpayers, the Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favour of the assessee by deleting an addition of ₹63 lakhs made under Section 69A of the Income Tax Act, 1961.
The case titled Sham Lal vs DCIT pertained to the Assessment Year 2016–17, where the Revenue had wrongly treated sale consideration received from a property transaction as unexplained money.
🏠 What Was the Dispute?
- The assessee, Sham Lal, sold a property for ₹63 lakhs.
- The Assessing Officer treated the sale proceeds as unexplained money and added it under Section 69A.
- The reason? Alleged absence of disclosure in the income tax return and lack of explanation during assessment.
🧾 Assessee’s Stand
During appellate proceedings, the assessee:
- Produced sale deed, payment proofs, and other documentary evidence.
- Explained that the property was originally purchased for ₹84 lakhs and sold for ₹63 lakhs, resulting in a short-term capital loss.
- Clarified that Form 26QB information (relating to TDS on property transactions) also matched the transaction.
⚖️ ITAT’s Findings
The Tribunal observed:
- The transaction of sale was genuine, duly evidenced by sale documents.
- The Assessing Officer failed to rebut the sale documents and evidences furnished by the assessee.
- Since ownership and transaction were proven, the sale proceeds could not be treated as unexplained money.
Thus, the addition of ₹63 lakhs made under Section 69A was rightly deleted by the Commissioner of Income Tax (Appeals) and confirmed by ITAT.
✅ Key Takeaway
Sale consideration received through documented property transactions cannot be treated as unexplained money simply due to non-disclosure in the original return, especially when full evidences are furnished during appellate proceedings.
Assessees should maintain proper documentation for all property transactions to defend their case effectively.