₹8.66 crore cash trail found on woman's computer during Income Tax raid: Why ITAT gave her a clean chit
The Income Tax Appellate Tribunal (ITAT), Hyderabad, has ruled in favour of a woman taxpayer after the Income Tax Department treated cash expenditure of more than ₹8.66 crore found in documents recovered during a search at her residence as unexplained income.
The tribunal held that the expenditure related to a real estate company's business and could not be added to her taxable income without establishing her connection with the transactions.
In its order dated 9 October 2026 in ACIT, Central Circle-2(2), Hyderabad vs Chinthakunta Ramesh Sridevi (ITA Nos. 698 and 699/HYD/2022), the tribunal dismissed the tax department's appeals for assessment years 2017-18 and 2018-19.
The dispute arose after a search and seizure operation under Section 132 of the Income Tax Act was conducted on 12 October 2018 as part of an investigation into the Rithwik group of companies.
During the search, officials recovered 97 pages of documents from a computer located in an office room at the taxpayer's residence. These documents contained details of cash payments towards land purchases, property registration, house construction and other expenses.
The assessing officer treated ₹7.72 crore in expenditure during assessment year 2017-18 and another ₹94.26 lakh during assessment year 2018-19 as unexplained cash expenditure. The amounts were added to the woman's taxable income under Section 115BBE of the Income Tax Act.
The taxpayer denied that the transactions belonged to her and argued that the seized documents related to Rithwik Projects Pvt Ltd, a company engaged in real estate development and project execution.
She submitted a confirmation from the company and ledger extracts to establish that the expenditure related to its business activities, including purchases of earth, sand, aggregates and other project-related expenses.
However, the assessing officer rejected the explanation. The department argued that the descriptions in the company's ledger did not match those in the seized documents. It also pointed out that the seized records showed cash payments, whereas the company's ledger reflected journal entries.
The department maintained that the taxpayer had failed to establish that the expenditure was incurred by the company rather than by her personally.
The taxpayer maintained that she had no business income and that the expenditure reflected in the seized documents did not relate to her personal financial activities.
She argued that the company had confirmed ownership of the transactions and incorporated the expenditure entries in its books of accounts.
The Commissioner of Income Tax (Appeals) examined the company's confirmation and ledger extracts and called for a remand report from the assessing officer. It found that the expenditure had been recorded in the company's books and directed the department to delete the additions.
The tax department challenged this relief before the ITAT.
The tribunal observed that the assessing officer had not established that the woman was engaged in the business activities to which the expenditure related.
It noted that the taxpayer had provided supporting evidence, including the company's confirmation and ledger extracts, to establish that the expenditure belonged to Rithwik Projects Pvt Ltd.
The tribunal also observed that the assessing officer had not identified any discrepancy in the company's records during the remand proceedings that could establish that the expenditure actually belonged to the taxpayer.
"In the absence of any fact or material to show that the assessee has any connection with those projects in respect of which the expenditure is incurred, the addition made by the Assessing Officer is not justified," the tribunal observed.
It accordingly upheld the appellate authority's decision to delete the additions of ₹7.72 crore and ₹94.26 lakh for the two assessment years. The tribunal dismissed both appeals filed by the Revenue, providing relief to the taxpayer against the unexplained expenditure additions.
Kirti jha
Kirti Jha is a Senior Content Producer at Mint, where she writes on mutual funds, taxation, personal finance and macroeconomic developments. Her reporting focuses on helping readers understand complex financial developments through data-driven, research-backed stories that explain how policy changes, market trends and regulatory decisions affect investors and households. <br><br> Before joining Mint, Kirti worked at ET Money, where she specialised in mutual fund research and investment analysis. She tracked portfolio disclosures, fund manager strategies, sectoral allocation shifts and investment trends, distilling large datasets into investor-focused insights. Her work combined quantitative analysis with consumer-centric storytelling, enabling readers to better understand fund positioning, portfolio changes and long-term investment opportunities.<br><br> Kirti holds a Bachelor's degree in Economics from Indraprastha College for Women, University of Delhi, and a Master's in Finance from the Jindal School of Banking & Finance at O.P. Jindal Global University. Her academic training emphasised analytical thinking, quantitative research and financial decision-making, providing a strong foundation in understanding capital markets, financial systems and economic policy. With a combined experience in investment research and financial journalism, she is committed to producing accurate, accessible and insightful journalism that empowers readers to make well-informed financial decisions.
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HomeMoneyPersonal Finance ₹8.66 crore cash trail found on woman's computer during Income Tax raid: Why ITAT gave her a clean chit
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