₹1.09 crore sent from Kuwait to India: ITAT Ahmedabad grants partial relief in income tax notice case

An Indian working in Kuwait’s oilfields faced intense income tax scrutiny over a tax dispute after sending money to his family in the home country. For now, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, has provided partial relief.

This case highlights why overseas earners should maintain clear records of foreign income and remittances to avoid complications, psychological stress, and tax-related repercussions later on.

With these basics in mind, let us discuss the salient features of the case and how the taxpayer ultimately secured partial relief from the Tribunal.

According to the facts of the case as detailed in the order provided on the official website of ITAT, Narshibhai is an Indian working in Kuwait. His salary there was consistently credited to the National Bank of Kuwait account. Later, from this salary, he transferred funds to his Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts at ICICI Bank and HDFC Bank in India.

The tax authorities received details and information about these transactions through the Specified Financial Transactions (SFT) reporting system. This resulted in several glaring discrepancies. As of 31 December 2018, the reported figures include the following:

Note: Data discussed above is for explanatory purposes only. For complete details, refer to the official order available on the ITAT website.

The real complications started because Narshibhai had not filed an original income tax return. Furthermore, upon receiving a tax notice, he filed a return declaring ‘nil income’ but did not initially provide complete bank statements, account details and reconciliations.

Due to these reasons, the Assessing Officer (AO) treated ₹ 3.63 crore as unexplained money under Section 69A of the Income Tax Act, 1961. These funds were taxed under Section 115BBE. These were the core legal provisions involved. Now, let us discuss what the ITAT Ahmedabad eventually decided.

During the appeal before the ITAT Ahmedabad, Narshibhai submitted his Kuwait bank statements, salary details, Indian bank records and other essential documents as directed.

Post the same after going through the facts of the case and documents diligently, the tribunal found that the following relief was justified:

The tribunal further directed that no addition should be made if the funds are established to be foreign income remitted to India or if the redeployment of such funds is established.

This ruling, dated 24th April, 2026, clearly highlights several important aspects that NRIs and common taxpayers should pay attention to. One such aspect is that foreign salary remittances cannot be automatically categorised as ‘unexplained income’; still, taxpayers, on their part, must have the essential documentary evidence to establish the source and movement of funds without any doubt.

In order to ensure that no tax-related complications arise in the future, NRIs should retain:

Other similar essential documents will be needed to corroborate facts.