1 day ago
Delhi ITAT Clears Tax Penalty After Airline Worker’s Currency Claim
Tax officials found a large amount of Indian money and foreign currency in a businessman’s home.
The businessman said the Indian cash came from his company’s bank accounts.
He said the foreign currency belonged to his sister-in-law, Kemp.
Kemp worked for Jet Airways and often travelled to other countries.
She gave officials a written statement confirming that the currency was hers.
The investigation team accepted her explanation and did not take the foreign currency.
Later, another tax officer called both amounts unexplained and imposed a higher tax treatment.
The appeals authorities disagreed because there was supporting evidence and no contrary proof.
The Delhi ITAT therefore upheld the relief given to the taxpayer.
A Delhi search found ₹1.12 crore and foreign currency worth ₹4.34 lakh at businessman Gupta’s residence.
Gupta said company cash had been withdrawn from 11 bank accounts after demonetisation concerns.
He said the foreign currency belonged to his sister-in-law Kemp, a Jet Airways employee who travelled internationally.
The Assessing Officer treated both amounts as unexplained money under Section 69A and applied Section 115BBE.
The CIT(A) granted relief, and the Delhi ITAT upheld it because Kemp’s written statement was corroborated and un disproved.
- Who
- Businessman Gupta, his sister-in-law Kemp, the Income Tax Department, the Assessing Officer, the CIT(A), and the Delhi ITAT.
- What
- The Delhi ITAT upheld relief from the treatment of cash and foreign currency found during a tax search as unexplained money.
- Where
- At Gupta’s residence in G.K. Enclave-1, Delhi, and before the Delhi ITAT.
- When
- The search took place on March 21, 2017; the ITAT ruling followed the subsequent appeals.
- Why
- Kemp provided written confirmation that she owned the foreign currency, her airline employment supported the explanation, and authorities had not produced sufficient contrary evidence.
Taxpayer and Appellate Authorities
Assessing Officer
Ownership of foreign currency
Taxpayer and Appellate Authorities
Gupta and Kemp said the currency belonged to Kemp, who had given it to Gupta for safekeeping; her written confirmation and airline employment supported the claim.
Assessing Officer
The Assessing Officer treated the foreign currency as unexplained money under Section 69A.
Treatment of Indian cash
Taxpayer and Appellate Authorities
Gupta said the cash had been withdrawn from 11 company bank accounts because of concerns following demonetisation and was kept at his residence.
Assessing Officer
The Assessing Officer treated the Indian cash as unexplained money and applied the higher tax rate under Section 115BBE.
Strength of evidence
Taxpayer and Appellate Authorities
The CIT(A) and Delhi ITAT found that the written statement and the investigation team’s decision not to seize the foreign currency supported Gupta’s explanation.
Assessing Officer
The Assessing Officer took a different view, although the appellate authorities found insufficient contrary evidence to disprove the explanation.
Key facts
- Indian currency found
- ₹1.12 crore
- Foreign currency found
- Worth ₹4.34 lakh
- Search date
- March 21, 2017
- Location
- G.K. Enclave-1, Delhi
- Tax provision invoked
- Section 69A of the Income Tax Act
- Higher tax provision
- Section 115BBE
- Foreign currency retention limit
- Up to USD 2,000 or equivalent under Regulation 3, subject to prescribed conditions
Sources
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