Demonetization Cash Deposits with Explained Source Not Taxable under Income Tax Act: ITAT

The Income Tax Appellate Tribunal (ITAT) has ruled that cash deposits made during the demonetization period cannot be treated as unexplained income subject to taxation, provided the taxpayer offers a proper and satisfactory explanation for the source of such deposits. The tribunal clarified that if the source of the cash is adequately explained and supported by evidence, it should not be subjected to double taxation or deemed as undisclosed income. This decision provides significant relief to taxpayers who had legitimate sources for their cash deposits during the demonetization drive.