Rishabh Agarwal Vs DCIT (ITAT Delhi)
Cash Found at Home Is Not Automatically Yours: ITAT Deletes Section 69A Addition
Cash seized from a family residence cannot be mechanically divided and taxed in an individual’s hands when other family members have identified their ownership and supported it with affidavits and personal books of account. In Rishabh Agarwal v. DCIT, the Delhi ITAT deleted the surviving addition of ₹1,43,624 under Section 69A, finding no plausible reason to tax cash belonging to other family members in the assessee’s hands.
The Search: Cash and Jewellery Found
A search was conducted on 8 March 2022 at the premises of the Sharda Group of Family and Agarwal Family. Cash and jewellery were found and seized during the proceedings.
From the residential premises of the Agarwal family, the Department found cash of ₹23,69,500. The Assessing Officer treated one-half of this amount, ₹11,84,750, as unexplained money belonging to Rishabh Agarwal and made an addition under Section 69A.
A separate addition of ₹8,03,469 was made for alleged unexplained jewellery. Both additions were challenged before the CIT(A).
The assessment concerned Assessment Year 2022-23 and had been completed under Section 143(3) through an order dated 26 March 2024.
CIT(A) Accepted Most of the Explanation
The first appellate authority deleted the entire jewellery addition.
Regarding cash, the CIT(A) accepted that ₹18,82,251 belonged to M/s. Idle Laminates Private Limited. Thus, a substantial part of the cash found at the residence was accepted as company cash rather than unexplained personal money.
For the remaining amount, recorded in the order as ₹4,87,248, the CIT(A) granted relief of ₹2 lakh on an estimated basis and confirmed the balance of ₹2,87,248.
One-half of that balance, ₹1,43,624, was retained as unexplained cash in the assessee’s hands.
This surviving addition was the sole issue before the Tribunal. The appeal did not require reconsideration of the jewellery addition or the company cash already accepted by the CIT(A).
The Assessee Identified the Actual Owners
The assessee had furnished a person-wise explanation of the remaining cash.
According to that explanation, ₹2,20,468 belonged to Rajeev Agarwal, ₹61,261 belonged to Rishabh Agarwal, and ₹2,14,270 belonged to Manisha Agarwal.
Rajeev Agarwal and Manisha Agarwal had furnished sworn affidavits confirming ownership of their respective amounts. They also stated that the cash was reflected in their personal books of account and formed part of the total cash seized during the search.
The assessee argued that, once the other family members had owned the cash and supported their explanation with accounting records, it could not be attributed to him merely because it was found at the common residential premises.
His counsel also contended that making an addition from cash already accounted for would result in double taxation.
Affidavits Were Supported by Accounting Records
The Tribunal examined the affidavits available on record.
It found that Rajeev Agarwal and Manisha Agarwal had specifically acknowledged that their cash formed part of the amount seized during the search. Their explanation was also linked to their respective personal books of account.
The assessee himself had admitted ownership only to the extent of ₹61,261, which the Tribunal described as purportedly recorded in his personal books.
The decisive point was therefore the identified ownership of the cash, supported by the material furnished. The explanation was not simply that the money belonged generally to “the family”; particular amounts had been attributed to particular persons.
No Reason to Tax Another Person’s Cash
The Revenue relied on the CIT(A)’s findings and sought dismissal of the appeal.
The Tribunal, however, held that once the other family members had owned their respective cash, there was no plausible reason to make an addition of that cash in Rishabh Agarwal’s hands.
Accordingly, it directed deletion of the surviving ₹1,43,624 addition and allowed the appeal.
The finding was specific to the evidence and ownership explanation in this case. The Tribunal did not lay down that every ownership affidavit must automatically be accepted, irrespective of supporting records or surrounding circumstances.
Author’s Comments
The place where cash is found and the person to whom it belongs are distinct factual questions. This distinction becomes particularly important during searches of shared family residences, where cash belonging to individuals and business entities may be kept at the same location.
Here, the original approach of attributing one-half of the seized cash to the assessee could not survive the ownership explanation accepted by the Tribunal. The affidavits identified both the owners and the amounts, while the personal books provided accounting support.
The ruling also shows why person-wise reconciliation is more useful than a general explanation about household savings. A clear reconciliation should connect the seized amount with each owner’s records and establish that the claimed cash formed part of the actual seizure.
The assessee’s argument about double taxation should nevertheless be distinguished from the Tribunal’s operative reasoning. The deletion rested principally on ownership and the supporting records, rather than a separate finding that the same amount had already been assessed to tax elsewhere.
For practitioners, the decision is useful against additions based on an arbitrary sharing of cash found at a family residence. Its strength lies in the specific, documented attribution of ownership, which should be established during assessment itself.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-3, Noida [in short ‘the CIT(A)’] dated 06.04.2026, for Assessment Year 2022-23.
2. The solitary issue assailed by the assessee in the present appeal is, addition of Rs.1,43,624/- on account unexplained cash confirmed by the CIT(A).
3. Shri Shiv Kumar Gupta, appearing on behalf of the assessee submits that a search action was carried out on the premises of Sharda Group of Family and Agarwal Family on 08.03.2022. Consequent to search unaccounted cash and jewellery were found and seized. In the case of assessee addition of Rs.11,84,750/- on account of unexplained money u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was made. Further, an addition of Rs.8,03,469/- was made on account of unexplained jewellery. The aforesaid additions made by the Assessing Officer (AO) vide assessment order dated 26.03.2024 passed u/s.143(3) of the Act were challenged by the assessee in appeal before the CIT(A). The First Appellate Authority deleted the entire addition in respect of alleged unexplained jewellery. With regard to unexplained cash, the CIT(A) accepted that out of total cash Rs.23,69,500/- found and seized from residential premises of the Agarwal Family cash aggregating to Rs.18,82,251/- belongs to M/s. Idle Laminates P. Ltd. In so far as remaining amount of Rs.4,87,248/-, the CIT(A) on estimation deleted the addition of Rs.2,00,000/- and remaining Rs.2,87,248/- was confirmed. One half share of the said unexplained cash was added in the hands of the assessee. The ld. AR contended that the assessee had furnished the details and bifurcation of cash belonging to the family members as under:-
| Rajeev Agarwal | Rs.2,20,468/- |
| Rishabh Agarwal | Rs.61,261/- |
| Manisha Agarwal | Rs.2,14,270/- |
| Total | Rs.4,87,248/- |
The ld. AR submitted that Rajeev Agarwal and Manisha Agarwal had sworn affidavit to the effect that Rs.2,20,468/- and Rs.2,14,270/-, respectively belongs to them and is reflected in their personal books of account. They further admitted that the aforesaid amount is part of the total cash seized during search proceedings. Once, the amounts have been owned by family members and has been reflected in their respective books of accounts, any part of the said amount cannot be added in the hands of the assessee. Any addition made from cash already accounted would result in double taxation of the same amount. Thus, the AR of the assessee prayer for deleting the addition.
4. Per contra, Shri Nirmal Nangia, representing the department relying on findings of the CIT(A) prayed for dismissing appeal of the assessee.
5. Both sides heard, orders of the lower authorities examined. The limited issue for consideration in the present appeal is addition of Rs.1,43,624/- confirmed by the CIT(A) on account of unexplained money.
6. During the course of search inter alia alleged unexplained cash of Rs.23,69,500/-was found and seized. The AO treated half of the aforesaid cash as unexplained money in hands of the assessee. During assessment proceedings, the assessee furnished bifurcation of cash seized belonging to the family members, the assessee also furnished affidavits sworn by Shri Rajeev Agarwal and Mrs. Manisha Agarwal admitting cash of Rs.2,20,468/- and Rs.2,14,270/- belonging to them. A perusal of the affidavit available on record reveals that the cash owned by Shri Rajeev Agarwal and Mrs. Manisha Agarwal is part of the total cash seized during search operation and the same has been reflected in their respective personal books of account. The assessee has admitted only cash to the extent of Rs.61,261/- and that to has been purportedly recorded in his personal books of account. Once, the cash has been owned by Shri Rajeev Agarwal and Mrs. Manisha Agarwal there is no plausible reason to make addition of the said cash in the hands of the assessee. Therefore, the addition of Rs.1,43,624/- which is part of cash seized during the search is directed to be deleted.
7. In the result, appeal by the assessee is allowed.
Order pronounced in the open court on Wednesday the 30th day of September, 2026.
