Bangalore tax tribunal overturns unexplained cash addition on landlord's Rs 14.96 lakh deposit
A Bengaluru landlord who deposited Rs 14.96 lakh in cash during demonetisation won a tax appeal, with the ITAT Bangalore deleting the unexplained-money addition under Section 69A.
In Bengaluru, a property owner who received rent and advances in cash deposited Rs 14.96 lakh during the 2016 demonetisation period, prompting a tax scrutiny. The Assessing Officer at Koramangala classified the entire sum as unexplained money under Section 69A and issued a notice. The landlord responded with detailed cash-books, bank statements and a cash-flow analysis linking the deposit to an opening balance of Rs 10.05 lakh and ongoing rental receipts.
The Commissioner of Income Tax (Appeals) initially upheld the addition, but the Bangalore bench of the Income Tax Appellate Tribunal reversed that decision in August 2026, deleting the Rs 14.96 lakh addition. The tribunal emphasized that taxable rental receipts and the existence of a continuous cash trail are separate considerations, and that the tax department must provide affirmative evidence to disprove a taxpayer’s explanation.
Why it matters
The ruling clarifies that cash rent receipts can be used to justify bank deposits, limiting tax authorities' ability to label such cash as unexplained.
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