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Cement trader deposited Rs 14.74 lakh during demonetisation; gets tax notice but wins ITAT relief
Times of India 5 hrs ago·11 Nov 2026, 1:20 pm
An Income Tax Appellate Tribunal (ITAT) recently ruled in favor of a Balasore-based cement trader who faced a tax notice for depositing Rs 14.74 lakh during the 2016 demonetisation drive. The Assessing Officer had questioned the source of these funds and estimated the trader's sales by comparing his business activity before and after the cash ban. Consequently, the officer classified Rs 5.72 lakh as unexplained cash and issued a notice to the trader.
This ruling is significant for the broader market as it sets a precedent for how tax authorities treat cash deposits made during periods of liquidity crunch. The ITAT's decision suggests that simply depositing cash during such times does not automatically imply tax evasion, provided the taxpayer can substantiate the source of funds. For investors, this highlights the importance of maintaining proper documentation and understanding the nuances of tax assessments during high-decisions events.
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