SHAHZEB KHAN,DELHI V. ASSISTANT COMMISSIONER OF INCOME TAX, DELHI

ITA 5737/DEL/2025

AI Insights

The case involves an appeal by Shri Shahzeb Khan against the order of the CIT(A) which sustained the addition of Rs. 25,00,000 as unexplained cash under section 69A of the Income Tax Act, 1961. The cash was found during a search operation under section 132 in the lockers of the assessee and his wife, allegedly belonging to M/s Goyal MG Gases Pvt. Ltd., a company associated with the assessee. The Tribunal examined the validity of the additions made by the lower authorities, focusing on the operation dates of the lockers and the ownership of the cash. The Tribunal concluded that the additions were not sustainable as the lockers were not operated in the relevant financial year and there was insufficient evidence to link the cash to the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838219 (ITAT-DELHI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Appeal Filed On: 17-09-2025
• Other Referred Cases: Pushpa Vadra vs ITO, DCIT vs Ashok Kumar Gupta
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: VED JAIN
• Keywords: Search and seizure
• Section: 132

Judgement Text

"5737_DEL_2025_Shahzeb Khan 1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT & MRS. RENU JAUHRI, HON’BLE ACCOUNTANT MEMBER ITA No. 5737/DEL/2025; Assessment Year: 2023-24 Shri Shahzeb Khan 11-F, Sector-8 Jasola Vihar, Zakir Nagar New Friends Colony New Delhi- 25 Vs ACIT Delhi (APPELLANT) (RESPONDENT) PAN No. AAJPK0105B Assessee by : Shri. Ved Jain, Advocate Ms. Uma Upadhyay, CA Revenue/Department by : Shri Jitender Singh, CIT DR Date of Hearing: 21.01.2026 Date of Pronouncement: 18.02.2026 ORDER PER RENU JAUHRI : The above captioned appeal is preferred by the assessee against the order dated 30.08.2025, passed by Ld. CIT(A), New Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as, “Act”) in Appeal No. CIT(A), Delhi- 30/10014/2022-23. 2. The assessee has raised following grounds of appeal which are reproduced as under: “1. That on the facts and circumstances of the case, the order passed u/s 250 by the Ld. CIT(A) is without proper opportunity and the same is not sustainable on facts and bad in law. Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 2 | P a g e 2.1 That on the facts and circumstances of the case, the Ld. CIT(A) was grossly erred in sustaining the addition of Rs. 25,00,000/- made u/s 69A by treating the cash found from the bank lockers of the assessee during search u/s 132 as unexplained without appreciating the explanation furnished. 2.2 That there is no case of any unexplained cash and the total cash of Rs. 15,00,000/- and Rs. 10,00,000/- found from the bank lockers in the name of the assessee and his wife being belonging to M/s. Goyal MG Gases P. Ltd. and other companies of goyal group, the action of the assessing officer in treating the cash as unexplained is illegal and bereft of merits. 2.3 That the cash so found being supported from cash in hand balance appearing in the audited books of accounts of M/s Goyal MG Gases Private Limited and other companies forming part of Goyal Group, the invocation of section 69A and consequential addition is misconceived and without any basis. 2.4 The Ld. CIT(A) erred in rejecting vital evidences of the companies to which seized cash amount pertains such as cash ledgers, audited balance sheets. GST/TCS returns, and confirmations without considering their relevance to prove the ownership and source of cash. 2.5 The addition sustained by the Ld. CIT(A) is contrary to settled law that in absence of incriminating material specifically relating to the assessee, no addition can be made merely on suspicion, conjectures, or third-party statements. 3. That the Ld. CIT(A) was not justified in upholding the validity of the assessment order even though the same was passed without valid approval from the superior authority, the same is illegal and void-ab-initio. 4. That the assessing officer erred on facts and in law in initiating penalty proceedings under section 271AAB(1A) of the Act. 5. That the appellant craves leave to add, amend, alter or forgo any or all of the grounds as may be necessary and in the interest of justice.” Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 3 | P a g e 3. The assessee has also filed the additional grounds of appeal which are as under: “6. Without prejudice to the above, on the facts and circumstances of the case, the addition of Rs. 15,00,000/- found in Locker No. 883 which was last operated on 29.02.2020 is not sustainable in the assessment year under consideration i.e. AY 2023-24. 7. On the facts and circumstances of the case, the addition of Rs. 10,00,000/- in respect of Locker No. 85 is not sustainable in the hands of the assessee in view of the fact that the said locker is not in the name of the assessee.” 4. Brief facts are that a search and seizure action was undertaken u/s 132 in the Goyal Gas Group of caseson 10.01.2023 in which the assessee was also covered. The assessee had filed his original return for A.Y. 2023-24 on 23.07.2023, declaring total income of Rs. 19,01,380/-. During the course of search, cash aggregating Rs. 26,52,000/- was found and seized from the bank lockers as under: Particulars Amount in Rs. Locker No. 883 held jointly in the name of Shahzeb Khan and Saba Khan (Assessee’s wife) maintained with Punjab National Bank. 15,00,000/- Locker No. 85 held in the name of Saba Khan (Assessee’s Wife) maintained with HDFC Bank 10,00,000/- Total 25,00,000/- 4.1 Based on the statement of Mrs. Saba Khan w/o the assessee, cash of Rs. 1,52,000/- found in the locker No. 85 stated to be belonging to her was released while balance cash of Rs. 10,00,000/- was seized as she had explained that the same belonged to M/s Goyal MG Gases Pvt. Ltd. and was kept in her locker on Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 4 | P a g e her husband’s instructions. Further, cash of Rs. 15,00,000/- found in locker No. 883 was seized as it was also stated to be belonging to M/s Goyal MG Gases (P) Ltd, in which the assessee was a Director. During post search proceedings, the assessee was asked to provide proof in support of his claim that the cash of Rs. 25,00,000/- seized from the two lockers belonged to M/s Goyal MG Gases Private Ltd. The assessment was completed after making addition of Rs. 25,00,000/- u/s 69 of the Act in the hands of the assessee in the absence of any satisfactory explanation supported by documentary evidences. 4.2 Aggrieved, the assessee preferred an appeal before Ld. CIT(A) who dismissed the assessee’s appeal as he did not find the explanation of the assessee satisfactory in the absence of evidence linking the cash to the group entities. Further aggrieved, the assessee has filed the present appeal before the Tribunal. 5. Before us, Ld. AR has made elaborate arguments which have been summarized in the written submissions filed as under: “ 7. So far as Locker No. 85 is concerned, the same is not in the name of the assessee at all. The AO in the assessment order itself admits that Locker No. 85 is in the name of Mrs. Saba Khan (wife of the assessee), wherein cash of Rs. 11,52,000/- was found, out of which Rs. 10,00,000/- was seized and Rs. 1,52,000/- was released to Mrs. Saba Khan. 8. This position is further fortified by the bank certificate, which clearly corroborates that Locker No. 85 stands in the sole name of \"Saba Khan\", thereby making it clear that the locker is not held by the assessee. Notably, this fact is duly admitted in the assessment order on page 2. Therefore, in the absence of any independent material showing that the cash found therein \"belongs to\" the assessee, no addition can be made in the hands of assessee merely because the locker-holder is the spouse. 9. Without prejudice, even on merits, the statement recorded during search shows that Mrs. Saba Khan owned up Rs. 1,52,000/- as her cash, which Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 5 | P a g e was accepted by the search team and released to her. Thus, the Department itself has treated a part as belonging to the locker-holder, which reinforces that ownership cannot be presumed in assessee's hands simply due to relationship. 10. In view of the foregoing, since Locker No. 85 is not in the assessee's name and there is no material to establish the assessee as the real owner of the locker or of the cash found therein, the essential condition for invoking section 69A fails. Accordingly, section 69A is inapplicable to the present case, and no addition can be sustained in the hands of the assessee on this account. 11. Coming to Locker No. 883 (PNB Lodhi Road), held jointly in the name of assessee (Mr. Shahzeb Khan) and his spouse (Mrs. Saba Khan), wherein cash of Rs. 15,00,000/- was found and seized. 12. Crucially, the bank has issued a categorical certificate that the last customer-operated date of Locker No. AF00883 (883) prior to the Department's operation was 29.02.2020 i.e., in FY 2019-20 (AY 2020-21). This contemporaneous bank evidence demolishes the presumption that the cash represents income/undisclosed money of the year under appeal, because the locker was not operated for nearly three years before the departmental operation. 13. Consequently, once it is established from official bank records that the locker remained unoperated since 29.02.2020, the seized cash cannot automatically be treated as assessee's unexplained money of the previous year under consideration. 14. Consistent with the above factual matrix, in the statement recorded u/s 132(4), the assessee stated that cash of Rs. 15,00,000/- found in Locker No. 883 was kept around 3 years back on instructions of Mr. Suresh Chand Goyal and claimed it belonged to M/s Goyal MG Gases (P) Ltd. The AO has rejected the explanation primarily for want of documentary proof. However, mere rejection of explanation does not dispense with the Revenue's burden to show that the money \"belongs to\" the assessee, especially where the surrounding facts (including non-operation since 29.02.2020 and joint holding) indicate otherwise.” 5.1 He has further argued that the last operation of locker No. 883 was on 29.02.2020 as is evident from the statement of Mr. Manjeet Singh, recorded on 12.01.2023 at the time of search of locker wherein this fact has been categorically stated. Ld. AR has argued that since the locker had not been operated during the relevant financial year, no addition could be made in respect of the case found therein in the year under Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 6 | P a g e consideration. Further, with regard to locker no. 85, in the name of assessee’s wife, Ld. AR has argued that since the locker was not in assessee’s name, no addition could be made in his hands as no material has been brought on record to establish the assessee’s ownership, possession or control over the said locker. Reliance has also been placed on decision of coordinate benches in this regard which are as under: (i) Pushpa Vadra vs ITO 1982(4) TMI 144 dated 17.04.1982 wherein it was held that addition u/s 69A cannot be sustained unless the assessee is proved to be the owner of money or jewellery found since the locker was not in assessee’s name. (ii) DCIT vs Ashok Kumar Gupta in ITA No. 1397/Del/2023 wherein it was held that presumption u/s 132(4A) could apply only against the actual owner or custodian of the lockers. In view of the facts and circumstances of the present case and in the light of above decisions of the Hon’ble co-ordinate benches, Ld. AR has argued that the impugned addition in the hands of the assessee is liable to be deleted. 6. On the other hand, Ld. DR has strongly relied on the orders of the lower authorities and has pointed out that the assessee’s wife had categorically stated that only Rs. 1,52,000/- belonged to her and the balance cash in her individual locker was kept at the behest of the assessee. 7. We have heard the rival submissions and carefully perused the material placed before us. Printed from counselvise.com 5737_DEL_2025_Shahzeb Khan 7 | P a g e 7.1 With regard to the locker No. 883 held jointly by the assessee and his wife, it has been demonstrated that the same was last operated on 29.02.2020. As such we are of the considered view that no addition could be made in the year under consideration in respect of cash found therein. 7.2 With regard to locker no. 85, held in the sole name of the assessee’s wife, we are inclined to accept the arguments made by the Ld. AR that no addition was called for in assessee’s hands as presumption U/S 132(4A) could not be invoked in his case and also no evidence or material has been brought on record to prove that the cash lying therein belonged to him. 7.3 Accordingly, we hereby delete the addition of Rs. 25,00,000/- made u/s 69A on account of cash found in these two lockers. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 18-02-2026. Sd/- Sd/- (MAHAVIR SINGH) (RENU JAUHRI) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 18.02.2026 Pooja Mittal, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "