The Income Tax Appellate Tribunal (ITAT) Bangalore recently ruled that cash previously withdrawn from a bank account and subsequently redeposited cannot be classified as ‘unexplained cash’ under Section 68 of the Income Tax Act. The tribunal accepted the assessee’s claim that the withdrawn funds were used for legitimate business expenses like labour and petty costs before being returned to the same account, leading to the deletion of the addition made by tax authorities.
Background of Section 68 Additions
Section 68 of the Income Tax Act, 1961, deals with the
