Gift from grand mother in cash

Your Grand mother should have the capacity to give you the gift. Source is important especially since the gift is in cash (considering demonetization)

Yes you can receive the gift from your grandmother but gift deed is must.

You may receive gift from your Grandmother, is tax exempt, which the IT authorities have no right to question or tax.

However, they do have the right to question and find out the source of your Grandmother's income, which she has given you as gift.