6 hrs ago
ITAT Rejects Tax Claim on ₹1.25 Crore PoA Receipt
Duraisamy Victor received ₹1.25 crore in his bank account during a property deal.
He said the money did not belong to him because he was acting for three property owners.
He had a registered power of attorney allowing him to collect property payments for them.
He later passed matching amounts to another property owner as an advance.
The tax department treated the money as Victor’s unexplained income.
The tribunal disagreed because the documents and bank movements supported his explanation.
The tribunal also removed a separate tax addition involving ₹66 lakh in cash deposits.
The case shows that money entering someone’s account is not always their income, but clear records are important.
The Chennai ITAT deleted a ₹1.25 crore unexplained-money addition against Duraisamy Victor.
Victor received the money in 16 instalments while acting under a registered power of attorney.
The funds were subsequently paid to Nalini Selvaraj as an advance for another property.
The tribunal found that matching receipts and payments supported Victor’s explanation that he was an intermediary.
The ITAT also deleted a separate ₹66 lakh addition involving cash deposits supported by Victor’s financial records.
- Who
- Duraisamy Victor, three property owners, the purchasers, Nalini Selvaraj, and the Income Tax Department were involved.
- What
- The Chennai ITAT deleted a ₹1.25 crore unexplained-money addition and a separate ₹66 lakh addition.
- Where
- The case was decided by the Chennai bench of the Income Tax Appellate Tribunal.
- When
- The property payments were made in July and August 2016; the ITAT order was dated 22 September 2026.
- Why
- The tribunal found that Victor received the money under a registered power of attorney and subsequently transferred corresponding amounts in the authorised property transaction.
Tax Department’s Position
Taxpayer and Tribunal’s Position
Ownership of the ₹1.25 crore
Tax Department’s Position
The tax department treated the amount received in Victor’s bank account as unexplained money in his hands under section 69A.
Taxpayer and Tribunal’s Position
Victor argued, and the tribunal found, that he received the money only as a power-of-attorney holder for the property owners.
Evidence of the transaction
Tax Department’s Position
The receipt of a large property-related amount in Victor’s account warranted tax scrutiny.
Taxpayer and Tribunal’s Position
The registered PoA, matching incoming and outgoing payments, property documents, and the absence of a corresponding addition in Nalini Selvaraj’s assessment supported Victor’s explanation.
Tax treatment of money handled for others
Tax Department’s Position
A receipt may be questioned when the taxpayer cannot establish its source, capacity, or subsequent use.
Taxpayer and Tribunal’s Position
Money passing through a taxpayer’s account is not automatically taxable income when documentary evidence shows it belonged to another party.
Key facts
- Taxpayer
- Duraisamy Victor
- Main amount
- ₹1.25 crore received in 16 instalments
- Legal provision
- Section 69A of the Income Tax Act
- Authority
- Chennai bench of the Income Tax Appellate Tribunal
- Power of attorney
- A registered PoA executed in 1996 authorised Victor to receive advances and sale consideration for three property owners.
- Subsequent transfer
- Victor paid corresponding amounts to Nalini Selvaraj as an advance for purchasing her property.
- Separate addition
- The ITAT also deleted a ₹66 lakh addition related to cash deposits.
Sources
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