ITAT Deletes Rs. 25 Lakh Addition, Holds Cash in Wife’s Locker Cannot Be Taxed Without Proof of Ownership
ITAT allowed the assessee’s appeal and removed the addition, holding that cash found in lockers could not be taxed in the assessee’s hands without proof of ownership to the relevant AY.
The present appeal has been filed by Shahzeb Khan against ACIT in the ITAT Delhi, challenging the order passed by CIT(A) under section 250 of the Income Tax Act, 1961, dated August 30, 2025.
The assessee filed his original return for AY 2023-24 on July 23, 2023, declaring a total income of Rs. 19,01,380. During the search, cash of Rs. 25,00,000 was found in two bank lockers. One joint locker in the name of the assessee and his wife at Punjab National Bank, and another locker only in the wife’s name at HDFC Bank. The tax officer treated this cash as unexplained money of the assessee and added it to his income under section 69A of the Income Tax Act.
Being aggrieved by this decision, the assessee approached the CIT(A). However, the CIT(A) believed that the explanation of the assessee was not satisfactory and found no evidence of a cask linking to the group entities. Therefore, CIT(A) rejected his explanation.
The assessee then approached ITAT. During the hearing, the assessee made two main arguments. First, the locker jointly held with his wife had last been operated on on February 29, 2020, almost three years before the search. Therefore, the cash could not be treated as income of the year 2023-24. Second, the other locker belonged solely to his wife, and there was no proof that the cash inside belonged to him.
On the other hand, DR argued that the wife had stated only Rs. 152,000 belonged to her, and the balance of cash in her individual locker was kept there on the instructions of her husband, so the addition was justified.
After examining the facts, the Tribunal agreed with the assessee. It held that since the joint locker was not operated for several years before the search, the cash could not be considered income of the relevant year. It also held that the locker in the wife’s name could not be taxed in the husband’s hands without proof that the money belonged to him.
As a result, the tribunal deleted the addition of Rs. 25,00,000 made under section 69A and also allowed the assessee’s appeal.
Case citation: Shahzeb Khan Vs ACIT (ITAT Delhi); ITA No. 5737/DEL/2025; 18/02/2026; 2023-24.
