TDS Dispute & Late Filing of Sale Deeds in Commercial Suits: Key Takeaways from Andhra Pradesh High Court

In GGR Housing India Private Limited Vs Navaratna Estates, the Andhra Pradesh High Court dealt with an important intersection of commercial litigation procedure and income tax deduction at source on property transactions under Section 194(1A) of the Income Tax Act 1961.

The core issue was whether the plaintiffs (assessee–companies engaged in real estate) could, at a later stage, place on record certified copies of sale deeds, Gram Panchayat resolutions, development fee challans, and TDS-related records, which were crucial to resolve a dispute on the actual sale consideration and the corresponding TDS paid.

The judgment clarifies:

  • How Order XI Rule 1 (as amended by the Commercial Courts Act, 2015) should be applied;
  • The meaning of “power, possession, control or custody” of documents;
  • When additional documents can be brought on record to counter a stand taken in the written statement;
  • The role of TDS challans and registered sale deeds in proving true sale consideration in property disputes.

Background of the Commercial Suit

Nature of the suit

The assessee-companies filed a Commercial Original Suit (C.O.S.No.11 of 2022) seeking:

  • Specific performance of an oral agreement dated 28.09.2015 for sale of certain immovable properties; and
  • In the alternative, refund of a substantial amount claimed to have been paid as sale consideration, together with interest.

The claim related to:

  • Plaint-A schedule property to be conveyed by the 1st defendant; and
  • Plaint-B schedule property to be conveyed by the 2nd defendant.

Pursuant to an amendment allowed in the plaint (vide I.A.No.347 of 2024), the plaintiffs added an alternate prayer for refund of Rs.36,22,05,315.00 with interest at 24% per annum if specific performance could not be granted for plaint schedule “A” and “B” properties.

Pleaded transaction structure

As per the plaint:

  • There was an oral agreement for sale of Ac.129.125 cents of land.
  • The agreed total sale consideration was Rs.74,30,79,830.00, to be paid (excluding TDS) in phases.
  • Sale deeds were actually executed only for Ac.79.89 cents, leaving Ac.29.93 cents allegedly untransferred.
  • According to the plaintiffs, although only part of the land was conveyed, a much larger portion of the consideration remained with the defendants, hence the alternative monetary claim of Rs.36,22,05,315.00.

The defendants admitted execution of sale deeds for Ac.79.89 cents, but disputed the quantum of consideration actually received and asserted that the entire payment related only to the land already transferred.

Application to File Additional Documents

I.A.No.271 of 2025 under Order XI Rule 1(5) CPC

The plaintiffs moved I.A.No.271 of 2025 seeking leave to bring on record 133 additional documents, which mainly comprised:

  • Certified copies of sale deeds executed by the defendants in favour of the plaintiffs;
  • Gram Panchayat resolutions;
  • Official challans evidencing payment of development and conversion charges to Gram Panchayat, Modavalasa and to Visakhapatnam Metropolitan Region Development Authority (VMRDA);
  • Google images / GPS map photographs evidencing development and possession of layout;
  • Other related records connected with the layout and the amended pleadings.

The plaintiffs contended:

  • These are public documents, recently obtained as certified copies;
  • They support the amended plaint and help prove possession, development activities, and most critically, the actual consideration paid under the earlier registered sale deeds;
  • The need to file these documents arose only after the defendants took a certain stand in their written statement, particularly concerning TDS under Section 194(1A) and the alleged higher sale consideration.

Objection by the defendants

The defendants objected and argued:

  • All these documents (particularly documents 1–21 related to NALA conversion charges and documents 24–133 being sale deeds) pre-dated the institution of the suit;
  • Being public documents available with statutory authorities, they were always capable of being obtained by the plaintiffs;
  • Under the strict regime of the Commercial Courts Act, 2015 and Order XI Rule 1, such documents ought to have been disclosed with the original plaint;
  • The plaintiffs had no reasonable cause for not filing them earlier, and the belated attempt after more than three years violated Order XI Rule 1(4) and Order XI Rule 1(5);
  • The documents were not genuinely connected to the amended portions of the plaint and were filed beyond 30 days from the amended plaint’s filing date;
  • The documents were only certified copies, allegedly raising issues under Section 65 of the Indian Evidence Act on admissibility of secondary evidence.

Order of the Special Judge (Commercial Court)

The Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam rejected I.A.No.271 of 2025, holding that:

  • All documents were of dates prior to institution of the suit;
  • They were either already in the plaintiffs’ power and custody (docume...