Tax raid found Rs 16L cash; man wins case in ITAT
In a recent tax case in Mumbai, a man named Chandak was relieved of a tax notice under Section 69A after the Income Tax Appellate Tribunal (ITAT) Mumbai ruled in his favor. The case originated from a tax search raid conducted by the Income Tax Department which resulted in the seizure of Rs 16 lakh in cash from his residence.
Chandak had opted for the presumptive taxation scheme under Section 44ADA and claimed that the cash was from various sources belonging to his family, including his father, mother, wife, daughter, and son. However, the Income Tax Assessing Officer did not accept his explanation and considered the entire amount as unexplained cash.
In their decision, ITAT Mumbai acknowledged that the accumulation of cash by a housewife or senior citizen out of decades of savings is a cultural norm. Additionally, they noted that gifts received by minors during celebrations are not subject to formal accounting. The tribunal emphasized that the explanation should be evaluated based on socio-cultural realities and human behavior rather than strict accounting standards.
Chandak, represented by Chartered Accountant Vishwas Agrawal, won the case on July 20, 2026. The court held that the assessment officer should consider explanations in the context of human probabilities and not rely solely on technical accounting standards.
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