Case Law Analysis
|Income Tax Appellate Tribunal
Section 69A IT Act | Cash Withdrawals from Proprietorship Capital Account Within Week of Search Establish Source, Reversing Unexplained Income Addition : ITAT Delhi
ITAT Delhi has ruled that cash withdrawn from a proprietor’s capital account shortly before a search can constitute a credible source for unexplained cash, overturning an addition of Rs. 9 lakh under Section 69A. This sets a critical precedent for small business owners facing scrutiny during income tax searches, affirming that ledger entries alone - even without vouchers - may suffice if consistent with business practice and timing.