ITAT Bangalore recently ruled that once rental receipts are reported and the landlord asserts that the rent was actually received in cash, the fact that the rental income has already been taxed doesn’t mean the cash from those receipts can’t be deposited into the bank later. The ITAT Bangalore clarified that if the rental income has already been disclosed, it serves as an identifiable source that should be taken into account when looking at cash-flow.
This judgement came about in a case involving Mr Chenaram from Bengaluru, who owned some properties that he rented out for cash. Chenaram also earned a good amount from rental advances which were also in cash. During the demonitisation phase, when Rs 500 and Rs 1,000 currency notes were no longer legal tender, Chenaram deposited Rs 14.96 lakh cash in his bank account.
