Demonetisation Deposits

Cash deposits Nov–Dec 2016

After demonetisation in November 2016, the Income Tax Department initiated Operation Clean Money to identify unexplained cash deposits. Notices under Section 142(1) or 148 are being issued even now to people who deposited old currency during Nov 8 – Dec 30, 2016. You need to explain the source of every deposit.

⏱ 30 days to respond; older notices may have tight deadlines

⚠️ Tax + 60% penalty under Section 115BBE if treated as unexplained income

Common Issues in This Type of Notice

Unexplained cash deposits

Business turnover mismatch

Agricultural income claims

Loans from friends/relatives

How We Handle It — Step by Step

Upload notice

Upload the demonetisation-related notice

Deposit analysis

Expert analyses each deposit against your declared income

Source mapping

Each deposit mapped to business receipts or legitimate sources

Case law support

Tribunal precedents cited where turnover was estimated

Reply submission

Comprehensive reply with all source explanations submitted

Documents You Will Need

Bank statements (all accounts) for Nov–Dec 2016

Cash book and daily cash register

Source of cash (business sales, prior savings)

Agricultural income proof (if applicable)

Loan agreements for cash borrowed

ITR for AY 2016-17 and 2017-18

Relevant Case Laws & Precedents

Phoolchand Lalchand Bafna vs ITO

ITAT Mumbai

When income is estimated on turnover basis, no separate addition for cash deposits from the same business turnover is sustainable.

Pr. CIT vs Agson Global Pvt Ltd

Delhi High Court

Cash deposits during demonetisation from pre-existing cash balance adequately explained through books need not be taxed.

Frequently Asked Questions

Is there a time limit for these notices?

Section 148A reassessment notices can be issued up to 10 years for deposits exceeding ₹50 lakhs.

What if the cash was from agricultural income?

Agricultural income is exempt but you need proper documentation like land records, crop receipts and Khasra papers.

Can these cases be settled?

Yes, many demonetisation cases can be settled under the Vivad se Vishwas scheme or through the appellate process.