The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has granted relief to a non-resident Indian (NRI) in a case involving cash deposits made during the demonetisation period of November–December 2016.
The bench of Madhumita Roy (Judicial Member) and Sanjay Awasthi (Accountant Member) has observed that the tax department had failed to establish any alternative source of income either for the assessee or his parents that could justify treating the deposits as unexplained. In light of the documented trail of remittances and absence of contrary evidence, the Tribunal held that the addition was unsustainable and deserved to be deleted.
The case pertained to the Assessment Year 2017–18, where an Indian-origin US citizen, residing and employed in the United States, deposited ₹11,18,500 in his Indian bank account during a visit to India between November 19 and December 4, 2016. The deposit was made amid the demonetisation exercise, when old currency notes were being phased out. According to the assessee, the deposited amount represented cash accumulated at his parents’ residence, including funds remitted from abroad during earlier visits.
During the proceedings, the assessee explained that he regularly sent money to his parents in India and that the cash found at home comprised past remittances and withdrawals made through legitimate banking channels. To substantiate his claim, he furnished detailed documentation, including foreign remittance receipts through MoneyGram, corresponding bank statements reflecting withdrawals, and passport records evidencing his travel to India. He also clarified that he had no independent source of income in India apart from interest earned on bank deposits.
However, the Assessing Officer rejected the explanation and treated the entire deposit as unexplained income. The amount was consequently added to the assessee’s taxable income and proposed to be taxed at higher rates under Section 115BBE of the Income Tax Act, which applies to undisclosed income under provisions such as Sections 68 to 69D and carries penal tax implications.
The Tribunal ruled in favour of the assessee-NRI, observing that the explanation offered was reasonable and supported by credible evidence. The ITAT emphasised that, considering the overall facts, the presumption should lean in favour of the taxpayer. It further noted that elderly parents cannot be expected to maintain meticulous records of cash held at home, particularly where the funds originate from documented foreign remittances.
Case Details
Case Title: ARUN BUSSI Versus ACIT
Citation: JURISHOUR-1056-ITA-2026(DEL)
Case No.: I.T.A No.2171/Del/2023
Date: 08.04.2026
Counsel For Appellant: V.K. Sabharwal, Advocate
Counsel For Respondent: Pramod Kumar, Sr. DR
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