Tax raid finds Rs 4.34 lakh forex; man wins ITAT case with sister-in-law’s help
A Delhi man successfully challenged an Income Tax assessment after authorities seized cash and foreign currency during a post-demonetisation raid. The ITAT ruled in his favor after he proved the foreign currency belonged to his sister-in-law, an airline employee who frequently traveled.
Why it matters
The case highlights the complexities of tax compliance and the burden of proof for individuals during high-scrutiny financial investigations.
An income tax raid is conducted and foreign currency is found, but it doesn’t belong to you - what happens then? A few months after demonetisation, the Income Tax Department searched a man’s property in Delhi.During the operation, officials discovered Rs 1.12 crore in Indian currency and foreign currency worth Rs 4.34 lakh. The man was subsequently taken in for questioning by the tax authorities.What the case is aboutExplaining the large cash holding, the individual said he was a company director and that the company had withdrawn money from 11 of its bank accounts because it feared further action following demonetisation. The withdrawn cash was then kept at his residence.His advocates told the Income Tax Investigation Officers that the Rs 4.34 lakh worth of foreign currency belonged to his sister-in-law.
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