Case Law Details
Anil Kumar Vs ACIT (ITAT Delhi)
Large Household Cash Partly Disallowed Because Personal Savings Were Not Fully Substantiated; Property Sale Cash and Company Funds Accepted Because Supporting Details Were Produced; Cash Found During Search Partly Explained Because Evidence Supported Only Certain Sources; Shagun Money Claim Rejected Because Link With Seized Cash Was Not Established.
The Income Tax Appellate Tribunal (ITAT), Delhi, partly allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2022-23 concerning an addition of ₹36.50 lakh made on account of cash found during a search conducted under Section 132 of the Income Tax Act. The assessee, a Chartered Accountant in private practice, explained that the cash represented Shagun (marriage gifts) received during his daughter’s marriage, household savings, sale proceeds from an immovable property, and cash belonging to a company operated by him. The Assessing Officer rejected the explanation and made the addition, which was substantially upheld by the CIT(A). The assessee challenged the findings before the Tribunal.
The Tribunal examined each component of the cash separately. Regarding ₹24.31 lakh claimed as Shagun money received at the daughter’s marriage, it observed that although such gifts constituted the daughter’s Stri Dhan, there was no satisfactory explanation as to why the assessee retained the cash long after the marriage, particularly when the daughter was not residing with him. It also questioned why such a substantial amount had not been deposited into either the daughter’s or the assessee’s bank account. Accordingly, the Tribunal held that the linkage between the seized cash and the marriage gifts was not firmly established and confirmed the addition of ₹24.31 lakh.
With respect to ₹13.50 lakh claimed as personal cash belonging to the assessee, his wife, and his second daughter, the Tribunal observed that while every family may retain some cash for emergencies, such a large amount remained unexplained. It considered ₹2 lakh each for the assessee, his wife, and his second daughter, aggregating to ₹6 lakh, as a reasonable level of personal cash. Consequently, out of the addition of ₹13.50 lakh, relief of ₹6 lakh was granted and the balance ₹7.50 lakh was sustained.
The Tribunal, however, accepted the explanations relating to ₹2 lakh received from the sale of an immovable property and ₹4,21,555 stated to be cash in hand of Mittal Homes Pvt. Ltd., where the assessee’s wife was a director. After examining the details produced, it found these explanations to have an element of justification and directed the Assessing Officer to delete these additions.
As a result, the Tribunal confirmed additions aggregating to ₹31,81,500, comprising ₹24,31,500 relating to Shagun money and ₹7,50,000 relating to unexplained household cash. It deleted additions aggregating to ₹6,21,555, comprising ₹2 lakh linked to the sale of immovable property and ₹4,21,555 relating to the company’s cash. The ground challenging the levy of interest under Sections 234A, 234B, and 234C was held to be consequential and dismissed. The appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax(Appeals)-24, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] dated 18.11.2025 arising out of assessment order dated 16.03.2024 passed under section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2022-23. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
2. The assessee has raised following grounds of appeal:-
1. On the facts and circumstances of the case Learned CIT(A) has erred both in facts and in law upholding the impugned order passed by the respondent, illegally violating the principles of natural justice, without fair and objective application of mind to the facts of the case and the law applicable and without being guided by the binding decisions of the courts and tribunals and hence liable to be set aside and quashed and declared non est in law.
2. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) – 24 has erred both in facts and in law, sustaining the assessment of the appellant only on the basis of conjecture and surmises by rejecting the submission of the appellant.
3. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) – 24, has erred both in facts and in law, sustaining the assessment of the appellant to the tune of Rs.36,50,000/- which consists of Rs.24,31,500/- on account of disallowance of fact of shagun amount received on daughter’s marriage, Rs.2,00,000/- on account of sale proceeds from immovable property, Rs.4,21,555/- on account of cash belonging to Mittal Homes Private Limited, Rs.13,50,000/-on account of cash belonging to self, wife and second daughter despite the fact that appellant had submitted complete detailed submission with the Learned Commissioner of Income Tax (Appeals) – 24 with regard to same which is liable to be deleted.
4. That the provisions of section 234A, 234B and 234C of the Act are not at all applicable.”
3. Ground of appeal no.1, 2 and 5 are general in nature and hence the same are dismissed as infructuous.
4. The only issue contested by the assessee through ground of appeal no.3 is regarding addition of Rs.36,50,000/- made by the ld. AO on account of cash deposits.
5. Heard rival parties. Perused material available on records.
6. The ld. Counsel for the assessee took us through the brief factual matrix of the case. The appellant assessee is a qualified a Chartered Accountant and engaged in private practice. The appellant has been auditor of the Amrapali Group engaged in the business of real estate development. The Amrapali Group was accused of non-delivery of timely flats in several its projects and the matter went to Hon’ble Apex Court which, inter alia, directed an investigation into role of auditors and CFO of the group. During the course of investigation, the appellant had to undergo police investigation leading him to apply for medical bail. A search under section 132 was conducted on 03.02.2022 at the residence of the appellant, leading to recovery of cash of Rs.36,50,000/-. In his statement u/s 132(4), the appellant had submitted that the impugned cash is related to Shagun Ceremony received in the marriage of his daughter, household savings, proceeds of sale of immovable property and cash in hand of some companies owned and operated by him. The said defence was reiterated during the assessment proceedings. Not satisfied with the assessee’s submission, the ld. AO proceeded to make the impugned addition. The assessee reiterated the said submissions before the ld. First Appellate Authority. In appeal, the appellant gave details qua sources of cash to the Ld. CIT(A). After considering the same, the ld. CIT(A) dismissed the appellant’s contention regarding the genuineness of the sources while recording following in para-5.1.1 of his order on page-12. :-
7. Before us, the ld. Counsel for the assessee reiterated the arguments taken before the lower authority. It was contended that the cash found during search is related to genuine sources enumerated hereinabove. In support of his contentions, the ld. Counsel placed heavy reliance upon judicial precedents reportedly governing its matter. A voluminous paper book was filed comprising documents which are reportedly justifying the stand of the assessee qua genuineness of the cash found during search. As regards the cash receipts on the occasion of Shagun Ceremony of his daughter, the ld. Counsel submitted that the same comprises Stri Dhan of his daughter and can not therefore be added in his hands. The marriage of the daughter was solemnized on 17.07.2021. A list reportedly of friends and relatives giving cash gifts at Shagun Ceremony has been filed. It was further submitted that the appellant had sold plots in Rajivnagar Extension on 02.02.2022 and had, inter alia, received cash of Rs.2 lakhs. Sale deed in respect of immovable property transaction was filed. Another amount of Rs.4,21,555/- was stated to be belonging to wife of the appellant in her capacity as Director of a company namely Mittal Homes Pvt. Ltd. The said company was reportedly having cash in hand as on 31.03.2022 of Rs.4,35,555/-. It was submitted that as on 03.02.2022 i.e. date of search, the said company’s books reflected a cash in hand Rs.4,21,555/-. Another amount of Rs.15,50,000/- was stated to be cash held by various family members and which was found on the date of search. Again, the wife of appellant was reportedly having Rs.4 lakhs cash on account of personal savings. Accordingly, the ld. Counsel argued that the order of the ld. CIT(A) be set-aside and relief be accorded.
8. The ld. CIT-DR argued in favour of the order of the Ld. CIT(A) and the ld. Assessing Officer. It was contended that the appellant had not given the evidences before the lower authorities and that the decision of the Ld. CIT(A) is based upon the same. The ld. CIT-DR also argued that it is highly unlikely that the cash received at the time of Shagun Ceremony, being Stri Dhan, of daughter would be retained with the assessee even after the marriage and till the date of search. Similarly, it was argued that there was no evidentiary support in respect of said personal saving of appellant and family members.
9. We have heard rival submissions in the light of material available on records. We concur with the argument of the ld. CIT-DR that cash received on account of Shagun Money would belong as Stri Dhan of the daughter but then there cannot be any justification with the assessee to have retained the same with himself even much after the marriage of the daughter. The position is far more intriguing as the married daughter was not staying with the assessee. Further, the question arises as to why would assessee retain the cash of Rs.24,31,500/- received at the time of Shagun Ceremony in his house and not deposited in daughter’s or his own bank account. Safety concerns of the cash per se would entitle the cash to be deposited in bank account. The argument of the linkage of impugned cash found with the Shagun Ceremony is thus not firmly established. Accordingly, the addition qua cash found and seized of Rs.24,31,500/- is confirmed. Similarly, we do not find any merit in the justification of cash of Rs.13,50,000/- which has been linked to personal cash. Whereas, some cash is retained by every modern Indian family to meet exigencies of any kind, such large amount is inexplicable. We, therefore, estimate maximum personal cash of Rs.6 lakhs @Rs.2 lakhs each for assessee, his wife and second daughter. Thus, out of total cash addition of Rs.13,50,000/-, on this count, the assessee gets benefit of Rs.6 lakhs only and the balance Rs.7,50,000/- is confirmed. As regards, cash of Rs.2 lakhs received on account of sale of property and Rs.4,21,555/- on account of cash in hand in the books of Mittal Homes Pvt. Ltd. (where assessee’s wife is a director), we have noted from the details filed by the assessee that they have an element of justification. Accordingly, we direct the ld. AO to delete the impugned additions. To conclude out of total cash addition of Rs.36,50,000/-, amounts of Rs.24,31,500/-, and Rs.7,50,000/- aggregating to Rs.31,81,500/-is confirmed and of Rs.2 lakhs + Rs.4,21,555/- aggregating to Rs.6,21,555/-is deleted. Accordingly, ground no.3 is partly allowed.
10. Ground of appeal no.4 is towards imposition of interest levied under section 234A, 234B and 234C and therefore consequential in nature only. The same is therefore dismissed as infructuous.
11. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 03rd June, 2026.
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