On 8 August 2026, the Bangalore bench of the Income Tax Appellate Tribunal overturned a Section 69A addition against a Bengaluru landlord who had deposited Rs 14.96 lakh in cash during the 2016 demonetisation wave.
The assessing officer had flagged the deposit, issued a notice under Section 69A, and classified the entire sum as "unexplained money" after the landlord failed to prove a business source.
The landlord, who had received rent and advances in cash, produced cash books, bank statements, and a detailed cash‑flow statement showing an opening balance of ₹10.05 lakh on 1 April 2016 and a continuous inflow from rental receipts, advances and earlier deposits.
ITAT Bangalore rejected the officer’s premise that the funds were from cash sales, ruling that rent already taxed under "Income from House Property" could still explain the cash deposits, and thereby deleted the addition.
"The tribunal’s view aligns with the principle that taxable receipts can serve as a source for later cash deposits," said Chartered Accountant Suresh Surana.
The ruling underscores that landlords need not prove a business transaction to justify large cash deposits, provided they can trace their inflows to disclosed rental income.