A phrase often used by someone who does not want to go on a date or otherwise hang out with you, but does not want to hurt your feelings. The truthfulness and frequency of this statement depends mostly on whoever’s asking.
(See also: I have a boyfriend/I have a girlfriend)
Gus: We should hang out sometime, are you available any time in the next five years?
Amy: Um, no, I’m busy, like REALLY busy.
Gus (to self): Here we go again...
Person 1: hey you want to come over
Person 2: sorry I can’t I’m busy
Person 1: ok that’s fine