NRE Salary Credits Not Unexplained U/s 69A Without Contradictory Evidence: ITAT Pune

Assessment Unit Vs Dharmendra Kumar Dhaka (ITAT Pune)

An NRE Credit Is Not Unexplained Merely Because Salary Slips Are Missing—Accepted Foreign Employment & Bank Trail Defeat s.69A Addition

The Pune Bench of the ITAT has upheld the deletion of an addition of ₹1.44 crore u/s 69A, representing foreign salary credited to an NRI’s NRE account, since the assessee’s employment and residential status had been accepted by the Department in the immediately succeeding assessment year. It also confirmed deletion of a duplicated ₹36-lakh FDR addition. However, a separate addition of ₹2.25 crore based upon a reportable account balance u/s 285BA was restored to the AO because the assessee had not adequately disproved the specific information available with the Department.

The assessee, Dharmendra Kumar Dhaka, was a non-resident employed as a Plant Manager with M/s Frigoglass Jabel Ali FZCO in Nigeria. He did not file a return for AY 2019-20.

Departmental information reflected a fixed deposit of ₹36 lakh and an account balance/value of approximately ₹2.25 crore reported in Form 61B u/s 285BA(1). A notice u/s 148A(b) was issued, but the assessee did not respond. An order u/s 148A(d) was thereafter passed, followed by notice u/s 148 dated 28.03.2023.

The assessee neither filed a return in response to the reopening notice nor responded to the notices issued u/s 142(1) and the subsequent show-cause notices. The AO consequently completed an ex parte reassessment u/s 147 r.w.s. 144 & 144B, determining total income at ₹4,05,82,060.

The assessment included ₹1,43,82,053 as unexplained money u/s 69A r.w.s. s.115BBE, ₹36 lakh as unexplained investment u/s 69 r.w.s. s.115BBE, ₹2,25,28,420 as unexplained money u/s 69A and ₹71,587 as income from other sources.

Before the CIT(A), the assessee produced additional evidence. The CIT(A) called for a remand report from the AO, considered the assessee’s rejoinder and granted relief. The Revenue challenged deletion of the three principal additions before the ITAT. It did not contest the treatment of interest income of ₹71,587.

The first dispute concerned credits aggregating to ₹1,43,82,053 in the assessee’s HDFC NRE account. The assessee explained that the money represented salary received in foreign currency for services rendered in Nigeria.

During the remand proceedings, the AO objected that individual salary slips had not been furnished. The assessee explained that because of the passage of time, the salary slips were no longer available, though an employment certificate had been produced.

The ITAT noticed a decisive corroborative fact. The assessee’s case for AY 2020-21 had also been reopened on similar grounds. In the reassessment order dated 28.02.2025, the AO (International Taxation), Nashik, had accepted that the assessee was a salaried non-resident, worked as Plant Manager with the same Nigerian employer and resided in Nigeria.

The Department had thus accepted the essential employment facts for the immediately succeeding year. In view of that official finding and the employment certificate, the absence of old salary slips was not sufficient to treat the NRE credits as unexplained money. The Tribunal confirmed the CIT(A)’s finding that the sum represented salary earned for services rendered abroad and remitted to the NRE account. The Revenue’s first ground was dismissed.

The second dispute related to an addition of ₹36 lakh concerning fixed deposits. The records showed that the assessee had purchased four FDRs from his disclosed HDFC NRE account: ₹36 lakh and ₹35 lakh on 07.06.2018, ₹18 lakh on 12.09.2018 and ₹40 lakh on 25.09.2018. The total was ₹1.29 crore, which also appeared in Form 26AS/SFT information.

The AO accepted that FDRs aggregating to ₹1.29 crore had been purchased from the NRE account but proceeded on information showing FDRs of ₹1.65 crore. He therefore added the difference of ₹36 lakh.

The CIT(A) deleted the addition after verifying the four FDRs and corresponding bank entries. The ITAT found that the ₹36-lakh deposit formed part of the documented total of ₹1.29 crore and that the relevant details had also been furnished during remand proceedings. The deletion was accordingly confirmed.

The outcome differed for the reported balance of ₹2,25,27,689. The AO relied upon specific information in the statement of reportable accounts u/s 285BA showing that balance/value as on 31.03.2019. The assessee contended that there were no four independent bank accounts and attempted to correlate the amount with fixed deposits that had already matured in the preceding year.

The Tribunal found that the assessee had not produced adequate evidence even during the remand proceedings to disprove or reconcile the reported account balance. The CIT(A) had accepted the explanation without sufficient supporting material. Therefore, deletion of this addition was set aside, and the limited issue was restored to the AO for fresh examination.

The assessee was directed to respond to the AO’s notices and furnish all relevant documents without seeking adjournment on any pretext. The Revenue’s appeal was partly allowed for statistical purposes.

Author’s Comments

The order demonstrates that absence of one category of evidence does not nullify all other corroborative material. Salary slips are useful, but an employer’s certificate, NRE bank trail and a Departmental assessment order accepting the same foreign employment in the succeeding year may collectively establish the nature of the credits.

However, the ruling should be applied cautiously. It does not contain a detailed examination of ss.5 & 9 or the distinction between income first received in India and income received abroad and subsequently remitted. Its conclusion rests on the Tribunal’s factual characterisation that the salary was earned for services rendered abroad and remitted to the NRE account. In other cases, the place of first receipt, employment contract and salary-credit instructions may require closer examination.

The FDR ruling exposes a familiar SFT problem: reinvestment, renewal or overlapping reporting may inflate the apparent amount. An information figure cannot be added without reconciling it with the actual deposits and their funding bank account.

Conversely, the remand of ₹2.25 crore shows that blaming “incorrect portal information” is not enough. The taxpayer must obtain the complete Form 61B/SFT particulars and reconcile the institution, account number, year-end value, FDR maturity and transfer entries.

The balanced principle is clear: third-party information may trigger an enquiry, but addition requires reconciliation; equally, a taxpayer disputing a reported balance must answer data with documents, not denial.

Cases Discussed

Assessment Unit Vs Dharmendra Kumar Dhaka (ITAT Pune) — The supplied order concerns AY 2019-20 and addresses additions under sections 69A and 69, along with information relating to a reportable account under section 285BA(1). The Tribunal relied upon the Department’s reassessment order for AY 2020-21 as corroborative evidence concerning the assessee’s employment and non-resident status. The supplied Full Text does not cite any separate judicial precedent.

Key Statutory Provisions and Reporting Framework

The order involves sections 69, 69A, 115BBE, 142(1), 144, 144B, 147, 148, 148A and 285BA of the Income-tax Act, 1961, together with Form 61B/SFT reporting. TaxGuru has separately published material concerning section 148A and the procedure for Statement of Reportable Accounts under section 285BA read with Rule 114G.

FULL TEXT OF THE ORDER OF ITAT PUNE

This appeal filed by the Revenue is directed against the order dated 11.09.2025 passed by Ld. CIT(A), Pune- 13 [‘Ld. CIT(A)’] for the assessment year 2019-20.

2. The Revenue has raised the following revised grounds of appeal:-

“1. The Ld.CIT(A) erred in deleting the addition of Rs. 1,43,82,053/- u/s 69A of the Act by relying on documents submitted by the assessee directly before the Ld. CIT(A), which were not provided by the assessee during the assessment or at the time of remand, despite sufficient opportunity granted by the AО.

2. The Ld.CIT(A) erred in deleting the addition of Rs.2,25,28,420/- u/s 69A of the Act relying on documents submitted by assessee directly before the Ld. CIT(A), which were not provided by the assessee during the assessment or at the time of remand, despite sufficient opportunity granted by the AO.

3. The Ld.CIT(A) erred in deleting the addition of Rs.36,00,000/- u/s 69A of the Act relying on documents submitted by assessee directly before the Ld. CIT(A), which were not provided by the assessee during the assessment or at the time of remand, despite sufficient opportunity granted by the AO.”

3. Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for the period under consideration. On the basis of information available with the Department that the assessee had made fixed time deposit of Rs.36,00,000/- and as Form 61B i.e. Statement Reportable Account u/s 285BA(1) of the IT Act, account balance value is at Rs.2,25,27,689/- relevant to assessment year 2019-20, notice u/s 148A(b) of the IT Act was issued and since the assessee has not responded, order u/s 148A(d) of the IT Act was passed and notice u/s 148 of the IT Act was issued to the assessee on 28.03.2023. The assessee neither furnished any return in response to notice u/s 148 of the IT Act nor furnished any response to the subsequent notices respectively issued u/s 142(1) and show cause notices, therefore, the Assessing Officer vide order dated 21.03.2024 completed the assessment proceedings u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act by determining the income of the assessee at Rs.4,05,82,060/- as against no return of income furnished by the assessee. The above assessed income includes addition of Rs.1,43,82,053/- being unexplained money u/s 69A r.w.s. 115BBE of the IT Act, addition of Rs.36,00,000/- being unexplained investment u/s 69 r.w.s. 115BBE of the IT Act, addition of Rs.71,587/- on account of income from other sources and addition of Rs.2,25,28,420/- being unexplained money u/s 69A r.w.s. 115BBE of the IT Act.

4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A). The assessee furnished additional evidence before Ld. CIT(A) and after considering the remand report furnished by the Assessing Officer and also considering the rejoinder furnished by the assessee, Ld. CIT(A) allowed the appeal filed by the assessee.

5. It is the above order against which the Revenue is in appeal before this Tribunal.

6. We have heard Ld. Counsels from both the sides and perused the material available on record including the factual and legal paper book furnished by the assessee. In this regard, we find that the Assessing Officer has made total four additions, which are as follows:-

(i) Addition on account of credit of Rs.1,43,82,053/- in HDFC NRE Bank Account No.50100117404561.

(ii) Addition of Rs.36,00,000/- on account of FDR purchased.

(iii) Addition on account interest income of Rs.71,587/- (Against this, Revenue has not raised any ground before us.)

(iv) Addition of Rs.2,25,28,420/- on account of reportable account u/s 285BA(1) of the IT Act.

7. With regard to ground no.1 regarding deletion of addition of Rs.1,43,82,053/-, it is the claim of the assessee that he is NRI and salaried employee of M/s. Frigoglass Jabel Ali FZCO posted at Nigeria and the salary of Rs.1,43,82,053/- was credited in foreign currency to his NRE Account No.50100117404561 maintained with HDFC Bank. In this regard, we find that it is objection of the Assessing Officer in remand report that the assessee has not furnished any salary slip in this regard. On the other hand, it is the submission of the assessee that due to gap of long period the salary slips are not available although certificate of employment was furnished before Ld. CIT(A). However, we find that the case of the assessee for assessment year 2020-21 was also reopened u/s 147 of the IT Act on similar grounds and vide order dated 28.02.2025 passed u/s 147 r.w.s. 144 of the IT Act, the Assessing Officer (International Taxation), Nashik has accepted this fact that the assessee is a salaried Non-Resident Indian, employed as Plant Manager with M/s. Frigoglass Jabel Ali FZCO in Nigeria and was also residing in Nigeria. After perusing this assessment order passed for immediate subsequent year wherein fact of employment with the same company has been accepted, we are of the considered opinion that there is no error in the order passed by Ld. CIT(A) wherein he deleted the addition of Rs.1,43,82,053/- being salary income earned for services rendered abroad remitted to NRE Account & the same is confirmed. Accordingly, ground no.1 raised by the Revenue is dismissed.

8. With regard to ground no.3 regarding deletion of addition of Rs.36,00,000/-, we find that the assessee has purchased total four FDRs amounting in all to Rs.1,29,00,000/-. The same figure is also appearing in Form 26AS as reported through SFT. The details of above four FDRs are as under:-

9. The Assessing Officer has accepted the fact that FDRs amounting in all to Rs.1,29,00,000/- were purchased by the assessee through NRE Account No.50100117404561 maintained with HDFC Bank, however, on the basis of information that the assessee has purchased FDRs amounting in all to Rs.1,65,00,000/-, the differential amount of Rs.36,00,000/- (Rs.1,65,00,000 – Rs.1,29,00,000) was added to the income of the assessee. Ld. CIT(A) after considering the reply of the assessee that four different FDRs as mentioned above were purchased by the assessee for which entries are also appearing in the relevant bank account, the addition of Rs.36,00,000/- was deleted. After considering the totality of the facts of the case and in the light of the fact that FDR of Rs.36,00,000/- was purchased by the assessee on 07.06.2018 from HDFC Bank Account No.50100117404561 and the details in this regard were already furnished before the Assessing Officer in remand proceedings, we do not find any error in the order passed by Ld. CIT(A) wherein he deleted the above addition of Rs.36,00,000/- and the same is confirmed. Accordingly, ground no.3 raised by the Revenue is dismissed.

10. With regard to ground no.2 regarding deletion of addition of Rs.2,25,28,420/-, we find that the Assessing Officer made this addition on the basis of statement of reportable account u/s 285BA(1) of the IT Act since the account balance or value comes to Rs.2,25,27,689/- at the end of reporting period i.e. 31.03.2019. On the other hand, Ld. CIT(A) has deleted the above addition on the basis that the Assessing Officer has not brought any evidence on the record to justify, how the figure of Rs.2,25,27,689/- was computed. In this regard, we find that the assessee before Ld. CIT(A) explained that there are no four separate bank accounts rather four FDs were purchased which were already matured before assessment year 2019-20. It was the claim of the assessee that the Assessing Officer relied on some incorrect information.

11. On the other hand, we find that the Assessing Officer was in possession of some specific information which suggests that the account balance as on 31.03.2019 reportable u/s 285BA(1) of the IT Act was Rs.2,25,27,689/- and the assessee could not furnish any evidence in this regard even in remand proceedings, rather co- related this addition with maturity of FDR of lesser value, which occurred in previous assessment year, & Ld. CIT(A) accepted the contention of the assessee without any proper evidence. Considering the totality of the facts of the case, we are of the view that the order passed by Ld. CIT(A) is not justified wherein he deleted the addition of Rs.2,25,27,689/-, however, in the interest of justice, we deem it appropriate to provide one more opportunity to the assessee to explain his case before the Assessing Officer in this regard. Accordingly, we set-aside the order passed by Ld. CIT(A) only to this extent i.e. with regard to deletion of addition of Rs.2,25,27,689/- & restore this limited issue of addition of Rs.2,25,27,689/- back to the file of the Assessing Officer with a direction to decide the issue of addition of Rs.2,25,27,689/- afresh & as per fact & law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer in this regard and to produce relevant documents, submissions and evidences in support of his contention without taking any adjournment under any pretext, otherwise the Assessing Officer shall be at liberty to pass appropriate orders as per law. Thus, this ground no.2 raised by the Revenue is allowed for statistical purposes.

12. In the result, the appeal filed by the Revenue is partly allowed for statistical purposes.

Order pronounced on this 11th day of September, 2026.