Cash Deposited out of Earlier Withdrawal is not Undisclosed Income: ITAT

Karan Realty Pvt Ltd Vs ITO (ITAT Ahmedabad)

Introduction: In the case of Karan Realty Pvt Ltd vs. ITO, heard by the Income Tax Appellate Tribunal (ITAT) in Ahmedabad, several significant issues related to taxation were addressed. This article provides a comprehensive analysis of the ITAT’s judgment, focusing on the treatment of cash deposits, assessment validity, and capital gains.

Detailed Analysis:

1. Assessment Order Challenged: Karan Realty Pvt Ltd initiated an appeal against the assessment order passed under Section 144 read with Section 147 of the Income Tax Act, 1961, for the Assessment Year 2010-2011.

2. Cash Deposit Issue: The key contention in the case revolved around a cash deposit of ₹16.19 lakhs made by the assessee in their bank account. The Income Tax Officer (ITO) treated this deposit as undisclosed income. Still, the assessee argued that the deposit was sourced from previous cash withdrawals.

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