NRI Cash Deposits During Demonetization: ITAT Delhi Deletes ₹11,18,500 Addition, Upholds Foreign Remittance Source

Background and Overview

The Income Tax Appellate Tribunal, Delhi Bench, recently adjudicated a significant matter involving cash deposits made during the demonetization period of November–December 2016. The case, Arun BUSSI Vs ACIT (ITAT Delhi), concerned two interconnected appeals filed by a non-resident Indian settled in the United States, both arising from orders passed under Section 250 of the Income Tax Act, 1961. The central dispute revolved around a cash deposit addition of ₹11,18,500 treated as unexplained income by the Assessing Officer. The Tribunal's final ruling, pronounced on 08.04.2026, offered considerable relief to the assessee by directing deletion of the contested addition.

Case Details at a Glance

Nature of the Two Appeals

The matter before the Tribunal consisted of a batch of two appeals pertaining to the same assessee. Given their interconnected nature, the Tribunal disposed of both through a common order.

• ITA No. 231/Del/2021 — This was the substantive appeal, arising from an order dated 20.11.2020 passed by the Learned CIT(A), Delhi-42, under Section 250 of the Income Tax Act, 1961.
• ITA No. 2171/Del/2023 — This appeal arose from an order dated 01.06.2023, passed under Section 250 of the Act. It was connected to a rectification order passed by the Assessing Officer under Section 154 of the Act, specifically dealing with the application of Section 115BBE to the addition.

Facts of the Case

Who Is the Assessee?

The assessee, Mr. Arun Bussi, is a non-resident Indian (NRI) holding US citizenship, residing and employed in the United States along with his family. He had no source of income in India — neither business nor any other income — except interest earned on his Indian bank account. Neither his wife nor his children resided in India or had any occasion to generate income there.

What Was the Cash Deposit?

During his visit to India from 19th November 2016 to 4th December 2016, the assessee deposited a total amount of ₹11,18,500 in his savings bank account held with ICICI Bank, Jor Bagh Branch, New Delhi (Account No. 28601075302). The deposit was made in two tranches:

What Was the Explanation Offered?

The assessee's explanation, supported by a detailed affidavit dated 05.01.2024, stated that: