Avinash Aradhya Vs DCIT (ITAT Bangalore)
Cash Seized During Search Not Unexplained – ITAT Accepts Long-Held Withdrawals as Source; Section 69A Addition on Cash & Jewellery Deleted – Tribunal Cites Human Probability & CBDT Circular 1916; Assessee Justified Retention of Cash for Financial Liabilities – Jewellery Also Found Within Reasonable Family Holdings
A search operation in the case of M/s Gemini Professional Services Pvt. Ltd. led to recovery of ₹99.95 lakh cash from Shri Avinash Aradhya, who was present at the premises. AO treated the amount as unexplained money u/s 69A, holding that Assessee’s explanation of retaining cash from earlier withdrawals was not believable since such large cash could not have remained after demonetization.
CIT(A) upheld the addition, reasoning that (i) regular books were not maintained, (ii) post-demonetization withdrawals were negligible, and (iii) no prudent person would keep ₹2.6 crore cash for years after demonetization.
Before the ITAT, Assessee furnished cash books (2012–2019) showing withdrawals of ₹5.13 crore prior to demonetization, of which ₹2.49 crore was deposited in banks during the demonetization window, leaving ₹2.63 crore as continuing cash balance. He argued that he held this cash due to financial distress and ongoing NCLT & DRT proceedings in his group companies, fearing bank attachment of funds.
