The Ahmedabad Income Tax Appellate Tribunal has removed a ₹5.52 lakh addition and ordered a fresh review of nearly ₹2.50 crore linked to an Indian worker’s overseas earnings
An Indian national working in Kuwait has secured partial relief in a tax dispute after the Income Tax Department treated ₹3.63 crore held in his Indian bank accounts as unexplained money.
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) deleted a ₹5.52 lakh addition and directed the tax authorities to re-examine a separate addition of approximately ₹2.50 crore. The ruling was delivered on 24 April 2026.
Tax dispute over overseas earnings
The taxpayer, originally from Ahmedabad, had moved to Kuwait to work in the oilfields at Mina Al-Ahmadi. His salary was credited to his account with the National Bank of Kuwait before being transferred to his Indian bank accounts.
According to the case details, the Income Tax Department identified balances of ₹2.49 crore in HDFC Bank and ₹1.09 crore in ICICI Bank as of 31 December 2018. It also found an insurance policy valued at ₹3.77 lakh.
The information came through the department’s Specified Financial Transactions reporting system. As the taxpayer had not filed an original income tax return explaining the funds, the assessing officer sought details of his bank accounts and insurance policy.
Although he later filed a return declaring nil income, the department said the documents provided were insufficient to reconcile the reported amounts. It consequently treated the entire ₹3.63 crore as unexplained under Section 69A of the Income Tax Act and taxed it under Section 115BBE.
Tribunal orders fresh verification
During the appeal, the taxpayer submitted salary records, overseas bank statements and Indian NRE account documents. The evidence showed that his Kuwait earnings had been transferred to India through banking channels.
The tribunal found that the ₹5.52 lakh addition relating to ICICI Bank lacked independent evidence establishing undisclosed income. It therefore deleted that addition.
However, the tribunal retained the issue involving HDFC Bank for fresh examination. The assessing officer must verify whether the reported funds represented foreign earnings or their subsequent redeployment.
The tribunal directed that no addition should be made if the funds are established as foreign income remitted to India.
The ruling provides partial relief while leaving the larger HDFC Bank tax dispute unresolved.
