Delhi ITAT ruling: How relative’s airline job cleared businessman of tax penalty on foreign currency found in raid

A Delhi taxpayer has secured relief from the Income Tax Department after the Income Tax Appellate Tribunal (ITAT), Delhi, ruled in his favour in a case involving cash and foreign currency discovered during a tax search.

The case dates back to March 21, 2017, a few months after demonetisation. The Income Tax Department conducted a search at the property of a businessman named Gupta in G.K. Enclave-1, Delhi. During the search, officials found ₹1.12 crore in Indian currency and foreign currency worth ₹4.34 lakh.

Gupta was subsequently questioned by the tax authorities about the substantial amount of cash found at his residence.

Taxpayer’s explanation for cash found during search

Gupta told the tax authorities that he was a director of a company and that the company had withdrawn cash from 11 of its bank accounts because it feared further action in the aftermath of demonetisation.

According to Gupta, the withdrawn money was subsequently kept at his residence.

He also provided an explanation for the foreign currency discovered during the search. Gupta said the foreign exchange belonged to his sister-in-law, Kemp, who was employed with Jet Airways and was living with him at his G.K. Enclave-1 residence.

Kemp subsequently submitted a written statement to the Income Tax Investigation Officers confirming that the foreign currency found at Gupta's residence belonged to her and had been handed over to him for safekeeping.

Sister-in-law's statement supported foreign currency claim