Old Demonetisation Cash? ITAT Just Saved ₹74L

A Kolkata tax tribunal cancelled a ₹74.17 lakh income tax addition on demonetisation-era cash deposits. The key: the depositor had proper sales records and VAT returns. If you still have a pending demonetisation tax notice, this ruling is important for you.

Here's what happened: ITAT Kolkata deleted a ₹74.17 lakh income tax addition made under Section 69A on cash deposited during the November 2016 demonetisation window.. The taxpayer defended the deposits using recorded sales figures, VAT return filings, and books of accounts that matched the deposited amounts.. The tribunal found the tax department had no evidence to disprove the paper trail, making the 'unexplained cash' addition legally unsustainable..

What you should do: Locate your November–December 2016 bank deposit slips, sales ledgers, and any GST or VAT returns filed for that period — these are your primary defence documents.. Check whether you have a pending scrutiny notice or CIT(Appeals) order related to demonetisation deposits and share this ITAT Kolkata ruling with your tax consultant as a supporting precedent.. Avoid ignoring old demonetisation tax notices even if they seem stale — Section 69A assessments carry a 60% flat tax rate plus surcharge, so a ₹10 lakh addition can become a ₹7+ lakh demand..

Section 69A additions are taxed at 60% with a 25% surcharge — effectively 83% tax — with zero deductions. A single invoice file saved in 2016 can collapse the entire demand today.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.