Case Law Details
Smt Krishna Singh Vs DCIT (ITAT Delhi)
Summary: The ITAT Delhi condoned a delay of 146 days in filing the appeal and admitted it for adjudication. The dispute concerned the addition of ₹33,50,000 under section 69A of the Income-tax Act. The cash had been intercepted by the police on 24.04.2019 while the assessee and her husband were returning from Dehradun after the sale of a property for ₹64 lakh, of which ₹30,50,000 was received through RTGS and ₹33,50,000 in cash. The assessee disclosed the entire sale consideration, offered the capital gains to tax, and explained that the intercepted cash formed part of the disclosed sale consideration. The Tribunal noted that the returned income already included the ₹33,50,000 received in cash, making the separate addition a double addition. It also found that the cash interception occurred on the same day as the property sale and that the assessee was carrying the registered sale deed at the time. Accepting the explanation that the cash formed part of the total sale consideration, the Tribunal deleted the addition under section 69A and allowed the appeal.
Core Issue: The principal issue before the Tribunal was whether cash of ₹33,50,000, intercepted by the police while the assessee was returning after executing a registered sale deed of immovable property, could be treated as unexplained money under section 69A, despite the assessee’s claim that it represented the cash component of the disclosed sale consideration already offered to tax in the return of income.
Facts
The assessee and her husband were intercepted by the Static Surveillance Team of Police Station Modi Nagar, Ghaziabad, on 24.04.2019, while returning from Dehradun, and cash of ₹33,50,000 was found in their possession. At the time of interception, they were also carrying the registered sale deed of an immovable property situated at Dhoran Khas, Dehradun, which had been sold on the same day for a total consideration of ₹64,00,000. Based on the information received from the police authorities, proceedings under section 132A were initiated and the cash was requisitioned by the Income-tax Department. During investigation, the assessee consistently explained that out of the total sale consideration of ₹64 lakh, ₹30,50,000 had been received through RTGS and the balance ₹33,50,000 had been received in cash at the time of execution of the sale deed. In the return of income filed in response to notice under section 153A, the assessee disclosed the entire sale consideration, computed the capital gains thereon, and paid the applicable taxes. Nevertheless, the Assessing Officer treated the intercepted cash as unexplained money under section 69A, and the addition was confirmed by the CIT(A).
Submissions of the Parties
The assessee submitted that the intercepted cash was not an unexplained asset but formed an integral part of the disclosed sale consideration of the property sold on 24.04.2019. The registered sale deed evidenced the total consideration of ₹64 lakh, while the bank statement established receipt of ₹30.50 lakh through RTGS. The balance ₹33.50 lakh represented the cash component received from the purchaser and was already reflected in the computation of capital gains offered to tax. Therefore, making a separate addition under section 69A amounted to taxing the same income twice.
The Revenue contended that since cash of ₹33.50 lakh was found in the possession of the assessee during interception, and the assessee had failed to satisfactorily explain its source to the satisfaction of the Assessing Officer, the amount was liable to be assessed as unexplained money under section 69A.
Findings and Determination of the Tribunal
The Tribunal found that the assessee’s returned income of ₹42,21,948 already included the capital gains arising from the sale of the property, and the sale consideration of ₹64 lakh, including the cash component of ₹33.50 lakh, had been duly disclosed. Consequently, the separate addition of the intercepted cash under section 69A resulted in double taxation of the same income, which was legally impermissible.
The Tribunal further observed that the chronology of events fully corroborated the assessee’s explanation. The property had been sold and registered on 24.04.2019, and the assessee was intercepted by the police on the very same day while returning from Dehradun carrying both the registered sale deed and the cash. The registered sale deed established the total consideration of ₹64 lakh, while the bank records demonstrated receipt of ₹30.50 lakh through banking channels. The balance amount of ₹33.50 lakh found during interception perfectly matched the remaining sale consideration receivable under the transaction. These contemporaneous documents lent complete credibility to the assessee’s explanation.
The Tribunal held that where the source of cash is supported by documentary evidence, forms part of a disclosed transaction, and has already been subjected to tax, such cash cannot be treated as unexplained money merely because it was found in the assessee’s possession. Since the assessee had furnished a plausible and fully supported explanation regarding the source of the cash, the conditions necessary for invoking section 69A were not satisfied.
Outcome
The Tribunal allowed the appeal of the assessee and held that the cash of ₹33,50,000 represented the disclosed cash component of the sale consideration of the immovable property, which had already been considered while computing the assessee’s returned income. The separate addition under section 69A amounted to double addition of the same income and was therefore unsustainable. Accordingly, the addition of ₹33,50,000 as unexplained money was deleted.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The appeal in ITA No.1875/Del/2026 for AY 2020-21, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 10.07.2025 against the order of assessment passed u/s 153A r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.09.2021 by the Assessing Officer, DCIT, Central Circle-25, New Delhi (hereinafter referred to as ‘ld. AO’).
2. At the outset, we find that there is a delay in filing of appeal by the assessee before us by 146 days. Considering the reasons adduced in the condonation petition, in the interest of substantial justice, we hold that assessee was prevented from sufficient cause in not filing the appeal in time before us and accordingly we are inclined to condone the delay and admit the appeal of the assessee for adjudication.
3. The only issue to be decided in this appeal is as to whether the Learned CITA was justified in confirming the addition made by the Learned AO in the sum of Rs. 33,50,000 under section 69A of the Act in the facts and circumstances of the instant case.
4. We have heard the rival submissions and perused the materials available on record. In this case, an information was received from the SHO Police Station Thana, Modi Nagar, Ghaziabad vide its office letter dated 25-04-2019 that the Static Surveillance Team of Thana, Modi Nagar has found cash amount of Rs. 33,50,000 from Shri Rajveer Singh and Smt Krishna Singh on 24-04-2019. During the interception of cash, Shri Rajveer Singh and his wife Smt Krishna Singh were also carrying the sale deed of the property at Mauja Dhoran Khas, Pargana-Parvadoon, Dehradun, which was sold on the same day i.e. 24-04-2019.
5. Consequently, a warrant to requisition cash was issued under Section 132A of the Income Tax Act by the Principal Director of Income Tax Investigation, Kanpur on 35-2019, which was executed on 6-5-2019, wherein the cash of Rs. 33,50,000 was seized under Section 132A of the Act from the police authorities. Subsequently, the statement of the assessee was recorded under section 131(1A) of the Income Tax Act on 24-06-2019, in which the assessee stated that the cash amounting to Rs. 33,50,000 from the sale of residential plot situated at Mauja Dhoran Khas, Pargana-Parvadoon, Dehradun, which was sold by her to Smt Sudha Yadav on 24-04-2019 in the total consideration of Rs. 64 lakhs, out of which Rs. 30,50,000 were received through RTGS and remaining amount of Rs. 33,50,000 was received in cash, and the same amount was carried by the assessee and her husband Shri Rajveer Singh while coming from Dehradun.
6. Pursuant to action conducted under section 132A of the Act, proceedings under Section 153A of the Act stood initiated in the case of the assessee. The Assessee filed her income tax return for the assessment year 2020-21 on 23-09-2021 declaring the total income of Rs 42,21,948. The learned AO in the assessment order noted that Assessee had sold the property i.e. Khasra No. 445, Plot No. 17BA, Dhoran Khas village, Pargana- Parvadoon, Rajeshwar Nagar Phase 1, Dehradun to Smt Sudha Yadav during the year under consideration for total consideration of Rs 64 lakhs.The Assessee was directed to produce the copy of sale deed along with proof of payment received during the year which was complied with. In response, the Assessee filed her reply vide letter dated 27-09-2021 in which it was mentioned that two immovable properties were owned and there were no fresh investments made during the year. Further, out of two properties owned, one is sold for Rs 64 lakhs to Smt Sudha Yadav, wife of Ved Prakash Yadav and resident of 36 /9, New Type 3, O.F.D. Estate, Raipur, Uttarakhand. The payment of Rs 30,50,000 was received through banking channel and remaining sum of Rs 33,50,000 was received in cash. It was also submitted that Assessee had duly disclosed the capital gains and had paid due taxes thereon. The Assessee explained that Rs 33,50,000 was part of the total sale consideration of property sold for Rs 64 lakhs and that Rs 64 lakhs was already disclosed as sale consideration by the Assessee in the return of income. However, the Learned AO did not heed to the aforesaid contentions and proceeded to treat the seized cash of Rs 33,50,000 as unexplained money under section 69A of the Act and completed the assessment. This action of the Learned AO was upheld by the Learned CITA.
7. Admittedly the income returned by the Assessee of Rs 42,21,948 includes a sum of Rs 33,50,000 received in cash, which is the subject matter of independent addition made by the Learned AO as unexplained money. Hence this amounts to double addition. On this ground itself, the addition is deleted. Further, it is a fact that Assessee had sold the property on 24-4-2019 and the cash was intercepted by the police authorities on the same date i.e. 24-4-2019, while coming from Dehradun. The property registration happened in Dehradun and the Assessee after receiving the remaining sale consideration of Rs 33,50,000 in cash while returning from Dehradun was intercepted by the police and was found with cash of Rs 33,50,000 by the police authorities which was seized by the police. The Assessee also carried the sale deed for Rs 64 lakhs which was registered on 24-4-2019 in her hand at the time of interception of cash. There is absolutely no dispute on this fact. While it is so, the Assessee’s explanation that Rs 33,50,000 is part of the overall total sale consideration of Rs 64 lakhs deserves to be accepted. Further it was submitted that only a sum of Rs 30,50,000 was transferred through regular banking channels which is evident from the bank statements, out of the total sale consideration of Rs 64 lakhs. The Assessee has given a plausible explanation for the cash interception of Rs 33,50,000 and hence no part of the same could be treated as unexplained in the facts and circumstances of the instant case. Hence the addition made under section 69A of the Act is hereby deleted. The grounds raised by the Assessee are allowed.
8. In the result, the appeal of the Assessee is allowed.
Order pronounced in the open court on 15/07/2026.
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