2 weeks ago
Delhi ITAT Rejects Taxing Property Dealer’s ₹54 Lakh Deposits
Anil Rathee worked as an intermediary in property deals.
Buyers gave him cash to pass on to property sellers.
He deposited the cash into his bank account before transferring it to the sellers.
The tax department thought the deposited money belonged to Rathee and counted it as his income.
Rathee later provided bank statements, affidavits and sale documents to explain the transactions.
The tribunal found that the documents showed where the money came from and where it went.
It ruled that the money was not Rathee’s income.
The decision does not mean every large cash deposit into a personal account is automatically tax-free.
Anil Rathee deposited ₹54,00,500 in cash during financial year 2011–12.
The tax department treated the unexplained deposits as taxable income.
Rathee said he collected the money from property buyers for sellers.
He produced bank records, affidavits, sale deeds and a reconciliation statement.
The Delhi ITAT set aside the tax addition and allowed his appeal.
- Who
- Property dealer Anil Rathee and the Income Tax Department.
- What
- The Delhi ITAT cancelled a ₹54,00,500 income addition after finding that Rathee held the money as a property-transaction intermediary.
- Where
- The case was decided by the Delhi bench of the Income Tax Appellate Tribunal.
- When
- The dispute concerned financial year 2011–12 and assessment year 2012–13; the tribunal order was dated 30 July 2026.
- Why
- Documents supported Rathee’s explanation that buyers gave him the money to transfer to property sellers.
Income Tax Department’s Position
Anil Rathee’s Position
Nature of the cash deposits
Income Tax Department’s Position
The department treated the ₹54,00,500 deposited in Rathee’s account as unexplained taxable income.
Anil Rathee’s Position
Rathee said he collected the cash from prospective buyers and deposited it only to transfer it to property sellers.
Response during proceedings
Income Tax Department’s Position
The assessment record stated that Rathee did not initially respond to several notices, leading to reassessment and the income addition.
Anil Rathee’s Position
Rathee later submitted a detailed reply with transaction documents before the tribunal.
Evidence supporting the explanation
Income Tax Department’s Position
The tax authorities initially maintained the addition of the full deposited amount.
Anil Rathee’s Position
The tribunal found that bank records, affidavits, sale deeds and the reconciliation statement supported Rathee’s intermediary role and the movement of the money.
Key facts
- Cash deposited
- ₹54,00,500
- Financial year
- 2011–12
- Assessment year
- 2012–13
- Tribunal order
- 30 July 2026
- Evidence submitted
- Bank statements, three seller affidavits, seven buyer affidavits, eight sale deeds and a reconciliation statement
- Tribunal outcome
- The assessing officer’s and CIT(A)’s orders were set aside, and Rathee’s appeal was allowed.
Quotes
Anil Rathee
Property dealer
“I am a property dealer and have acted as an intermediary for Zile Singh and his family members, collecting cash from prospective buyers and passing it on to the sellers to facilitate registration.”
livemint.com
Sources
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