Demonetized Notes Received from Disclosed Debtors Cannot Be Treated as Unexplained Cash: ITAT

The ITAT (Income Tax Appellate Tribunal) has ruled that "demonetized notes received from disclosed debtors cannot be treated as unexplained cash." In a case involving cash deposits during the demonetization period, the tribunal found that if the assessee could satisfactorily explain that the cash comprised demonetized notes received from legitimate, disclosed debtors, then such deposits could not be automatically deemed as unexplained income under Section 69A of the Income Tax Act. This decision provides relief to assessees who had genuine cash balances sourced from their regular business activities or debt recoveries.