The Income Tax Appellate Tribunal (ITAT) Surat Bench ruled that a real estate firm's cash deposits during demonetization were mostly explained. The tribunal limited the addition to 25% of the disputed amount, rejecting the Assessing Officer's claim that the entire balance was unexplained.
Real EstateDemonetizationIncome TaxItatCash DepositsReal EstateJun 20, 2025
The ITAT is a quasi-judicial body that hears appeals against orders of the Assessing Officer (AO) and other lower authorities in income tax matters. It provides a forum for taxpayers to challenge decisions and seek fair and impartial adjudication.
The real estate business is often cash-intensive due to the nature of transactions, which frequently involve large sums of money. Holding cash is a common practice to facilitate quick transactions and manage liquidity.
Section 68 of the Income Tax Act, 1961 deals with the addition of unexplained cash credits to the taxable income of an assessee. If the source of cash credits is not satisfactorily explained, they can be added to the income and taxed.
The ITAT ruled that a reasonable disallowance of 25% of the disputed amount (Rs. 7.54 lakh) was sufficient, rejecting the AO's claim that the entire balance was unexplained. The tribunal also held that the higher tax rate under Section 115BBE did not apply for the assessment year in question.
The ITAT's decision is significant as it acknowledges the common practice of holding cash in real estate businesses and provides a fair and balanced approach to tax assessment, reducing the burden on firms that can reasonably explain their cash deposits.
As property prices and credit costs surge, home loan borrowers are counting on Finance Minister Nirmala Sitharaman to introduce key changes that could provide much-needed relief and boost the housing market.
Mumbai-based Kalpataru Ltd plans to launch a plotted development project in Nagpur, marking its entry into the city's real estate market. The project will be spread across 37 acres and will have 400 plots of sizes 1,200 to 4,000 sq ft range.
President Droupadi Murmu emphasizes the need to change societal attitudes towards women at the centenary celebrations of the Maharashtra Legislative Council.
Real estate analysts point to a shift in homebuyers' preferences and increasing prices in major micro-markets as registrations remain flat
Granite Real Estate Investment Trust (Granite REIT) has announced plans to offer C$800 million in debentures to support its growth strategy.
The fund, India Realty Excellence Fund VI (IREF VI), is set to invest in eight major Indian cities, including Mumbai, Pune, and Kolkata. It has already committed Rs 1,000 crore towards mid-income housing projects.