ITAT Mumbai Deletes Cash Deposit Additions Linked to Past Withdrawals and Family Savings
Court / Authority
Income Tax Tribunal
Update / Judgement Date
24 Jul 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
The “B” Bench of the Income Tax Appellate Tribunal, Mumbai, delivered its order on 25 February 2026 in the case of Nitinkumar Pravinchandra Kacharia for Assessment Years 2022–23 and 2023–24. The appeals arose from additions made under Section 69A of the Income-tax Act on account of alleged unexplained cash deposits following search-related assessments.
Cash Deposits Treated as Unexplained by Tax Authorities
The assessee, a salaried director of a private company, was subjected to assessment after a search action in a related group. The Assessing Officer noted cash deposits of ₹31.33 lakh in A.Y. 2022–23 and ₹15.59 lakh in A.Y. 2023–24. The assessee explained that the deposits came from accumulated personal and family savings, gifts received on occasions, and re-deposit of earlier cash withdrawals made during the COVID-19 period for medical emergencies. The Assessing Officer rejected the explanation, holding that the assessee failed to establish a clear year-wise trail of savings and gifts. On appeal, the CIT(A) accepted only part of the explanation, granting limited relief but sustaining additions of ₹23.99 lakh for A.Y. 2022–23 and ₹14.69 lakh for A.Y. 2023–24 as unexplained money.
Tribunal Accepts Nexus Between Withdrawals and Deposits
The ITAT observed that the assessee had consistently reported substantial income in earlier years and had withdrawn significant cash in the two years preceding the deposits as a precaution during the pandemic. The Tribunal held that once withdrawals from known bank sources are established, the burden shifts to the Revenue to prove that the cash was spent elsewhere. In the absence of any evidence showing alternative use of the withdrawn amounts, mere suspicion could not justify additions. The Tribunal found the explanation inherently probable and commercially realistic in the given context.
Accordingly, the ITAT deleted the sustained additions for both assessment years and allowed the assessee’s appeals.
Full Judgement / Attachment
Full Judgement
