Addition deleted as assessee was only a carrier of cash not owner who came up to own it

Addition deleted as assessee was only a carrier of cash and the real owner had come forward owning the cash

In a recent judgment, ITAT Agra has held that there was no need for addition in the hands of the assessee who was only a carrier of cash when the real owner had come forward and own up the cash seized by the Investigation Wing.

ABCAUS Case Law Citation:
5170 (2026) (06) abacus.in ITAT

In the instant case, the appellant assessee had challenged the order passed by the CIT(A) in confirming the order of assessment passed u/s 144 r.w.s. 148 of the Income-tax Act, 1961 (the Act) making an addition on account of seized cash.

The assessee was an individual and had not filed her return of income for the relevant AY as her income did not exceed the maximum amount not chargeable to tax. During the year large amount of cash was intercepted by Police from the custody of the assessee along with her brother from the car.

The assessee submitted that said cash belonged to his brother in law who had also confirmed this fact before the Investigation Wing n response to the proceeding initiated u/s 131(1A) of the Act.

The said brother-in-law specifically stated that he was regularly assessed to income tax. It was submitted that he was engaged in agricultural activities by taking agricultural lands on lease from the land owners and after production of agricultural produce on the said lands, sells it to the different mandis and that after selling,  the consideration was received, which was utilized for repayment to the persons from whom the lands were taken on lease and other allied expenditures incurred for carrying on agricultural activities.

He submitted copy of mandi receipts from Krishi Utpadan Mandi Samiti Khair to prove the evidence of sale of agricultural produce in the Mandis. He also submitted the third-party confirmations as provided by the land owners wherein they admitted that  they had leased out their agricultural land to him and furnished copy of khasra and khatauni of the said lands to evidence the existence of said agricultural lands.

The said brother-in-law categorically owned up the cash seized by the police authorities stating that the same was earned by him on account of selling of agricultural produce. It was stated that the assessee was taking the cash to make the payment on behalf of him to the land owners, when on the way, Mathura Police seized the cash.

The Tribunal observed that the stand taken by the assesseeand her brother-in-law before the Investigation Wing, was categorical that seized cash belonged to only to said brother-in-law and the same had been owned up by him. Also, the Assessing Officer of the assessee and the Assessing Officer of her brother-in-law was the same person.

The Tribunal further observed that the said brother-in-law had also written in his letter that the assessee was only a carrier of cash which stood intercepted by the police enroute which was meant for payments to be made to agriculture land owners on behalf of him. Which was a plausible explanation. Therefore, when the brother-in-law had come forward and own up the cash there was no need for the said sum to be even considered and added in the hands of the assessee.

Accordingly, the Tribunal deleted the addition in the hands of the assessee.

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