Re-Deposited Cash from Withdrawals Not Turnover: ITAT quashes Rs. 33.7 Lakh Income Addition

The Income Tax Appellate Tribunal (ITAT) has quashed a tax addition of Rs 3.37 lakh, ruling that cash re-deposited into a bank account soon after a withdrawal cannot be treated as undisclosed income or turnover. The case involved a taxpayer who had withdrawn cash for a specific purpose and then redeposited the same amount back into the bank when the transaction did not materialize. The Assessing Officer had treated the redeposit as unaccounted income. However, the ITAT observed that the assessee was able to provide a satisfactory explanation and a clear trail of the funds, demonstrating that it was the same cash being returned to the account. The tribunal held that such re-deposits, when properly explained, do not constitute fresh income. This ruling protects taxpayers from being unfairly taxed on cash movements that are merely circular in nature.