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Facts
A search and seizure operation found cash amounting to Rs. 54.13 lakhs at the assessee's and her son's premises. The Assessing Officer and CIT(A) treated the entire amount as unexplained under Section 69A, rejecting the assessee's explanations of past savings, gifts, and money held for medical emergencies due to lack of documentary evidence.
Held
The Tribunal, acknowledging the assessee's history as an income tax payee and her submissions regarding the sources of cash and accumulated savings, held that a lumpsum addition of Rs. 5 lakhs was just and proper. This resulted in a relief of Rs. 49.13 lakhs for the assessee, with the caveat that the decision should not be considered a precedent.
Key Issues
Whether the lower authorities were correct in confirming the entire addition of Rs. 54.13 lakhs as unexplained cash found during search under Section 69A of the Income Tax Act, 1961.
Sections Cited
Section 143(3), Section 69A
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Income Tax Appellate Tribunal, DELHI BENCH: ‘E NEW DELHI
Before: SHRI SATBEER SINGH GODARAAND
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Delhi’s-23 order dated 31.03.2025 having DIN and order no. ITBA/APL/S/250/2024-25/1075344183(1), involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Learned senior counsel states very fairly that the assessee wishes to press for her sole substantive grievance on merits that both the lower authorities have erred in law and on facts in treating the cash found/seized during search of Rs.54.13 lakhs as unexplained in the Assessing Officer’s assessment framed on 27th March, 2023 and upheld in the lower appellate discussion reading as under: “6 In Ground No 4 the appellant has contested the addition on account of cash found during search of Rs 54,13,000 u/s 69A of the Income Tax Act. 6.1 During the course of the search and seizure action, cash of Rs. 15,68,000/- were found at the premise of assessee at flat no. 1801, A wing, 18th floor, Chaitanya Towers, Prabhdevi, Mumbai, Maharashtra 400025 out of which Rs. 15,00,000/- were seized. 6.2 As per AO, during the course of the assessment proceedings, the assessee was asked to submit the details of the source of the cash found from the premise of the assessee. In response to the said notices, the assessee filed her reply and as per AO the reply of the assessee is not acceptable as no documentary evidences like bank statement reflecting withdrawals and evidences of receipt of gift etc. were submitted by the appellant. As per AO mere stating that the seized cash is accumulated from her past savings does not discharge onus from the assessee. 6.3 As per AO, it would not be out of the context to state that if any person is having any cash-intensive business, it may be possible that he is holding cash due to business requirements. The appellant business background does not draw confidence that she may be having access to such huge cash. The assessee is found holding huge 2 | P a g e amount of cash but without any documentary evidences in support of same. Here is the situation in which Smt. Usha Jhunjhunwala was found unable to substantiate her submissions with supporting evidences. Further, the assessee in her sworn statement taken during the course of the search action stated that her son Sh. Ashish Jhunjhunwala looks after the business of all her business entities/concerns. The business background of Sh Ashish Jhunjhunwala also does not draw confidence that he has access to cash due to business needs. 6.4 As per AD, even in her old age Sh. Ashish Jhunjhunwala is the only one who takes care of her. When Sh. Ashish Jhunjhunwala looks after all of her mother, then it doesn't seem feasible that huge amount of cash found in possession of Smt. Usha Jhunjhunwala was given by her son for saving purpose. Hence, it makes it clear the explanation offered by the assesee is not satisfactory and no documentary evidence in support of her claim was submitted by the assesee. Hence, as per the whole amount of Rs. 15,68,000/-remained unexplained at the end of the assessee. 6.5. As per AO, further, during the search and seizure action cash of Rs. Rs.38,45,000/-found at Flat No. 1501, A Wing, 15th Floor, Chaitanya Towers, Prabhadevi, Mumbai, Maharashtra 400025 (premise of Sh. Ashish Jhunjhunwala) was found Out of which cash amounts to Rs. 37,75,000/- was seized. 6.6 It has been contended by AO that during the course of the search action, the Ashish Jhunjhunwala was asked to submit the details of the source of the cash. In his reply, Sh. Ashish Jhunjhunwala stated that cash of Rs. 17,75,000/-relates to his saving given by his father, However, no supporting documents/papers/records in support of his claim were provided by him, therefore he offered a blanket reply to justify the source of part of cash. Regarding the source of the rest 20,00,000/-, Ashish Jhunjhunwala has stated that Cash of Rs. 20,00,000/- is the interest income received by him in cash from various parties. 6.7 During the assessment proceedings, Sh. Ashish Jhunjhunwala was asked to furnish the details of the source of the cash found during the course of the search. In response to the said notice, Sh. Ashish Jhunjhunwala submitted his reply and notices were issued to the assesee i.e. Sh. Usha Jhunjhunwala requiring her to submit the details of the source of the cash found to the volume of Rs. 38, 50,000 from the premise of Sh. Ashish Jhunjhunwala. In response to the said notices, the assesee filed her reply. However, the reply of the assesee was not found satisfactory.
3 | P a g e 6.8 As per AO, the assesee was asked to submit the source of the cash withdrawals, if any. In response, the assesee submitted no bank account details or bank withdrawal details or source of cash generation. The assesee was asked to submit the cash book or details of the source of the any business through which her husband made earnings. In response, the assessee submitted no cash book or nature of the business done by her husband. 6.9 As per AO, the assesee took plea of holding this money to meet any unforeseen medical emergency. In this regard, it is pertinent to mention that as per the government guidelines, the medical expenses only upto Rs. 2 lacs are allowed in cash. Hence, there is no need to accumulate so much cash. Further, the assesee lives in a metropolitan city Mumbai (not a rural area) having well connected medical facilities in every corner of the city and where transactions in non-cash mode may be made at relative ease. Therefore, this plea of the assesee is just an after-thought and nothing else. Accordingly, the contention of the Assessee deserves rejection. 6.10 As per AO, the assesee submitted that the part of the cash is received from relatives and friends as gift. In support of her claim, the assessee doesn't submit any documentary evidences like gift deed, details of the occasion on which gift is received along with any proof whatsoever. As the Assessee has claimed to be the owner of money found during search and no plausible explanation has been submitted to explain same. Accordingly, the provisions of section 69A are attracted to the instant case. 6.11 As per AO, the onus of explaining the source of the cash is not discharged by the assesee. Thus, the cash to the volume of Rs.54,13,000/- (Rs. 38,45,000/- Rs. 15,68,000/-) remained unexplained and as such the addition of Rs. 54,13,000/- were made to the returned income under section 69A as income from the undisclosed source. 6.12 In this regard it has been contended by the appellant that during the course of search, cash of Rs 15,68,000 found during the course of search at the premise of appellant and cash of Rs.38,45,000 were found during the course of search at the premise of Mr. Ashish Jhunjhunwala (son of the appellant) 6.13 As per the appellant it has been admitted in the impugned order that cash found during search was the accumulation of her past savings of household expenditure given to her for day to day for running of house. The AO also noted that such sum was regularly given to her by her husband till his death on 25.06.2016 and thereafter by her son and in addition to that, there was accumulation 4 | P a g e of cash out of gifts received from friends and relatives in family functions and on other various occasions. However, the Id. AO ignored the submission of the assessee and made the addition in respect of cash found during the course of search. 6.14 As per the appellant, the AO noted in para 5.10 of the impugned assessment order that it has been claimed by the appellant that cash of Rs. 38.50 Lacs was given to her by her late husband to meet medical emergencies, The AO has also noted the submission of the appellant that she is 80 years in age and living alone in her apartment and therefore, was not comfortable in keeping such cash with herself as she is ailing on health grounds and therefore requested her son to hold this cash on her behalf to meet any medical emergencies. Because of this reason, the cash of the appellant was found with her son. This claim of the appellant has been accepted by the AO that this cash found with Mr. Ashish Jhunjhunwala belongs to the appellant but the explanation that it was given to her by her husband is not accepted by the AO and thereby made the addition in the hands of the appellant. 6.15 As per the appellant, it is very common in India that to run the house, cash is given by gents to the ladies of house by showing it as drawings for household expenditure, but the ladies save a part of it and accumulate which may be huge also in case of an aged lady and the age of the present appellant was 78 years of age on the date of search. There cannot be any documentary evidence for such household savings by ladies. This is also common in India that in family functions such as Birth of a Child, Marriage, Birthday, Anniversary etc. and on various occasions such as Diwali, Holi, Rakhi, Bhaiya Duj, Karwa Chauth etc., cash gifts are received by the elder ladies from younger generation (Gents and Ladies both) and such older ladies generally accumulate the same and there cannot be any documentary evidence for such savings, but this claim cannot be rejected on this basis that there is no documentary evidence. We must consider the social custom and financial status of the appellant's family and there cannot be any hard evidence for such savings. For instance, in F. Y. 2013-14, the cash summary of her husband shows a total drawing of Rs. 2.33 lacs. These facts support the claim of the appellant about saving in cash of Rs. 15.68 Lacs during her lifetime and it should be accepted. Hence, the assertion of the AO that cash should be with the person who runs cash intensive business is without any basis and away from ground realities and customs in our society. In view of the above the explanation of the appellant about source of cash found in course of search may please be accepted, and the addition may be deleted.
5 | P a g e 6.16 The appellant submitted the details of taxable income declared by the appellant and his son for AY 2015-16 to AY 2021-22 as follows:
6.17 The appellant brought our attention to the Balance sheet of the Smt Usha Jhunjhunwala and Shri Ashish Jhunjhunwala for AY 2021- 22 and submitted that the appellant and her son have adequate net worth to keep the cash in hand found during the course of search. As such it has been submitted that keeping in view the status of the family, taxable income declared, facts and circumstances of the case the addition made on account of addition made on account of cash found during the course of search may please be deleted. 1075344183(1) 6.18 I have considered the facts of the case and submission of the appellant. During the course of search, cash of Rs 15,68,000 found during the course of search at the premise of appellant and cash of Rs.38,45,000 were found during the course of search at the premise of Mr. Ashish Jhunjhunwala (son of the appellant). 6.19 In respect of cash so found during search addition of Rs 15,68,000 and addition of Rs 38,45,000 were made u/s 69A of the Income Tax Act. In respect of the source of cash found, the appellant has not submitted the documentary evidence. The appellant has not submitted bank account details or bank withdrawal details or source of cash generation. 6.20 During the assessment proceeding, the appellant was asked to submit the cash book or details of the source of the any business through which her husband made earnings. However, the appellant
6 | P a g e submitted no cash book or nature of the business done by her husband. 6.21 The appellant has taken the plea that cash was kept to meet any unforeseen medical emergency. Further, the appellant lives in a metropolitan city Mumbai (not a rural area) having well connected medical facilities in every corner of the city and where transactions in non-cash mode may be made at relative ease. Therefore, this plea of the appellant is just an after-thought and nothing else. Accordingly, the contention of the appellant deserves rejection. 6.22 The appellant has also taken the plea that the part of the cash has been received from relatives and friends as gift. However, the appellant has not submitted any documentary evidences like gift deed, details of the occasion on which gift is received along with any proof whatsoever. 6.23 In view of the above addition on account of total cash found during search of Rs 54,13,000, is confirmed. In the result, this ground of appeal is dismissed.”
3. Both the parties vehemently reiterate their respective stands against and in support of the impugned cash seized addition. Suffice to say, the Revenue could hardly dispute that the assessee all along has been an income tax payee and getting assessed at the maximum marginal rate. There is further no denial to the fact that she had filed her cogent supportive evidence along with the details explaining sources of the cash seized as well as accumulated savings very well from the preceding assessment years. The Revenue, on the other hand, seeks to buttress the point that it was the assesseee’s onus only to plead and prove all these facts to the entire satisfaction of both the learned lower authorities. Be that as it may, we are of the considered view in this factual backdrop that 7 | P a g e a lumpsum addition of Rs.5 lakhs only in the given facts would be just and proper with a rider that the same shall not be treated as a precedent. We order accordingly. The assessee gets relief of Rs.49.13 lakhs in other words. All other issues between the parties are kept open at this stage.
4. This assessee’s appeal is partly allowed. Order pronounced in the open court on 5th January, 2026 Sd/- Sd/- (AMITABH SHUKLA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 12th January, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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