An individual found Rs 15 lakh in cash in his bank locker, which the Income Tax Department initially treated as unexplained income under Section 69A. Despite the locker being in his name, he provided evidence that the cash belonged to himself, his family members, a partnership firm, and was also from gifts. While the initial assessment rejected most of his explanation, subsequent appeals to the CIT (Appeals) and the Income Tax Appellate Tribunal (ITAT) provided relief, with the ITAT ultimately accepting the cash as explained and belonging to the joint family, criticising the selective rejection of evidence by lower authorities.
A person named Mr. Shailendra Ramesh Chandra Rathi whose bank locker has been searched on 23rd September 2021 and revealed around Rs.15,01,150 in cash. The Income Tax Authorities considered that this entire cash amount as unexplained income and attempted to add it to Shailendra's taxable income u/s
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to
CCI PRO
for unlimited access
Why Upgrade to
CCI PRO?
-
No Ads
-
WhatsApp Broadcasts
-
Daily E-Newsletter
-
Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
Buy CCI PRO Now
Already a PRO member?
Login here
for an ad-free experience.
The Income Tax Department issued a notice because the Rs 15 lakh cash found in the locker was initially considered unexplained income under Section 69A of the Income Tax Act, as the locker was in the individual's name.
The individual explained that the cash belonged to himself, his wife, father, mother, sister-in-law, a partnership firm, and also included gifts from relatives. He submitted documentation like income tax returns and cash books to support these claims.
Initially, the Assessing Officer (AO) rejected most of the explanation, accepting only Rs 1,533 as explained money and treating the rest as unexplained income belonging to the individual.
The appeal to the CIT (Appeals) provided some relief, accepting money attributed to the mother, sister-in-law, and firm, but still disallowed amounts relating to the wife, father, and gifts due to documentation issues.
The ITAT found the lower authorities' decision incorrect and criticised their selective acceptance and rejection of explanations. They accepted that the cash belonged to the joint family, was properly documented, and deleted the addition of Rs 11,14,117 made under Section 69A.