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Jul 17, 2025
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Indian engineer wins Rs 69-lakh unexplained investment income tax case in ITAT Mumbai on these technical grounds
On June 27, 2025, an Indian engineer , who had been working in Dubai, United Arab Emirates since 1997 won a case of Rs 69-lakh unexplained investment under Income Tax Act, 1961 on technical grounds. The engineer had bought a property in his hometown in Kerala for Rs 39 lakh and also put Rs 30 lakh in fixed deposits (FDs). However, the income tax department claimed that both the property purchase (Rs 39 lakh) and FD investment (Rs 30 lakh) were ‘unexplained investments’ under Section 69 of the Income Tax Act, 1961.
As a result, the entire Rs 69 lakh (39+30) was added to his income and accordingly he was issued tax notices and penalty proceedings were also initiated against him. To fight against this tax notice and penalty proceedings, this engineer at first filed an appeal in the Dispute Resolution Panel (DRP) of the tax department. He explained that since the time he was working in Dubai, he had been sending remittance money back to his family in India. He also explained that this Rs 30 lakh in FDs were simply old FDs that had matured and were reinvested.
He also explained that the funds for the property investment came entirely from his salary in Dubai, meaning the income had never accrued or arisen in India. The DRP accepted the explanation for the FD money but rejected the property investment explanation so he filed an appeal in ITAT Mumbai.
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