The Real Estate Regulatory Authority (RERA) Haryana has intensified its crackdown on black money in the real estate sector by referring cases involving cash transactions above ₹2 lakh to the Income Tax Department for investigation. In a recent landmark order, the Panchkula bench of RERA Haryana directed a Panipat-based builder to refund ₹10 lakh taken in cash from a homebuyer, along with ₹7.73 lakh in interest, and referred the matter for tax scrutiny.
The Case Background
The dispute originated when Jasvir Singh from Panipat booked a 2BHK+study flat in the ‘Harmony Homes’ project, an Affordable Group Housing Colony at Sector 40, Panipat, on June 9, 2018. The total sale consideration was fixed at ₹23,50,000. Singh initially paid ₹1,18,537 via cheque against the booking application. On June 26, 2018, he further deposited ₹10 lakh in cash with Sanjay Gupta, director/partner of Real Heights Developers, receiving an official receipt mentioning “confirmed booking.”
However, after the booking fell through, the builder refunded only the cheque amount of ₹1,18,537, refusing to return the ₹10 lakh cash payment.
Builder’s Defence and Dispute Over Receipt
The builder claimed that Singh was dissatisfied with the allotted 14th-floor unit and demanded a flat on the 2nd floor, thus refusing to proceed with the purchase. The company also denied receiving the ₹10 lakh, alleging that the cash receipt was forged.
During hearings, RERA observed that the stamp on the ₹10 lakh receipt matched that on the official cheque receipt. Despite being asked to provide a signature sample for forensic verification, Sanjay Gupta refused, weakening his defence. Singh, on the other hand, fully disclosed the source of his cash payment.
RERA’s Observations and Verdict
RERA held that the builder used his dominant position to make wrongful gains at the expense of the homebuyer, noting that such practices erode trust in the real estate system. The bench stated:
“It is the very essence of the Act and its regulations to put a stop to such malpractices which make the allottees lose faith in the system, or else the very purpose of the enactment of the Act is defeated.”
The authority directed the builder to refund ₹10 lakh with ₹7.73 lakh in interest (calculated at an annual rate of 10.9%) within 30 days.
Income Tax Investigation Initiated
Significantly, as the cash payment exceeded ₹2 lakh, RERA referred the matter to the Director General Investigation, Sector 17, Chandigarh, for action under the Income Tax Act. This move is part of RERA Haryana’s broader campaign to curb unaccounted cash transactions in property deals.
Impact on Real Estate Sector
The ruling sends a strong warning to builders against accepting unaccounted cash payments. It also reassures homebuyers that regulatory authorities are committed to upholding transparency and protecting consumer rights in the property market.
Conclusion
With this order, RERA Haryana not only secured justice for the complainant but also strengthened its stance against black money in real estate. Industry experts believe that such decisive action will help clean up the sector and foster greater trust between developers and homebuyers.
