Five foreign asset cases won on old documents

If you hold foreign assets, filing the return is the easy half of compliance. Schedule FA questions arrive later, sometimes much later: a reassessment notice for a year you barely remember, a show-cause asking how a property was funded, a penalty notice under the Black Money Act for a schedule you missed. For foreign income and assets there is no reassessment time limit, so “later” can mean a decade.

What decides those cases is rarely a clever argument. Reading the orders, the pattern is almost embarrassingly consistent: the taxpayers who won were the ones who could still produce the documents. Bank statements from 2012. A payroll annexure from 2017. A remittance certificate from 2015. Below are five decided cases, each linked to the order or a published report, followed by the checklist they add up to.

Names and citations are as published in the tribunal orders and tax press. These are public judicial records; in the stories below we refer to each person the way the tribunal does, as the assessee.

The missed year

Addl. CIT v. Manoj Mahendrakumar Pandya · BMA No. 6/M/2024 · ITAT Mumbai · 26 June 2024 · read the order

Between September 2012 and March 2013, the assessee paid AED 51,614 in advances to a builder for an under-construction Dubai property, remitted from his HDFC bank account in India. He reported the investment in Schedule FA year after year, from AY 2013-14 onwards, and again in the years that followed. One return, AY 2016-17, missed it. For that single year the department levied the Rs 10 lakh penalty under section 43 of the Black Money Act.

What won the case: the HDFC bank statements showing the original 2012-13 remittances, his written replies to section 133(6) notices, and the Schedule FA entries of the years on either side. The tribunal called the omission a bona fide, inadvertent clerical mistake, noted that the investment “has always been shown in returns of income in preceding years as well as in succeeding years”, and upheld deletion of the penalty. An asset consistently disclosed either side of one missed year, with the payment trail intact, is not concealment.

By the time the appeal was heard, the bank statements doing the arguing were twelve years old.

The ESOP penalty

ACIT v. Rohit Krishna · BMA Nos. 36 to 40/Mum/2024 · ITAT Mumbai · 27 November 2024 · case digest

The assessee held Vodafone Group PLC shares from employee stock options, sitting in an employer-facilitated Equatex UK account. He never reported the holding in Schedule FA across AYs 2017-18 to 2020-21, and the department sought the Rs 10 lakh penalty for each year.

What won the case: Form 12BA from his employer showing the ESOPs taxed as perquisites (Rs 18.99 lakh worth in AY 2018-19 alone), the annexure to Form 16 Part B showing the disclosure under section 17(2), and proof that full TDS had been deducted on the perquisite value. The shares were bought with income India had already taxed. The tribunal held that “bonafide actions of the tax payers must be excluded from the application of provisions of this stringent legislation” and upheld deletion of every year’s penalty.

The document that carried the case is the annexure most people never look at when their Form 16 arrives. Here it answered for four years of penalties. A Chennai bench reached the same result in April 2026 for ESOPs held through a Jersey fiduciary, calling a fully-taxed but unreported holding a “technical breach” that does not warrant penalty (Kishore Kumar Rajagopal, BMA Nos. 16 to 18/CHNY/2025).

The cash that wasn’t

Ravindra Gaur v. ITO · ITA No. 673/JPR/2023 · ITAT Jaipur · 19 February 2024 · read the order

An NRI settled in the United States for over thirty years had his AY 2015-16 reopened on information about “cash deposits” in his Indian bank account. The department added Rs 86 lakh as unexplained cash credit under section 68.

What won the case: his NRE account statements for FY 2014-15, an SBI certificate confirming the account was an NRE account that could receive only foreign remittances, and his US passport establishing non-resident status. The statements showed the credits were foreign-currency wire transfers, not cash, and an NRE account cannot legally accept rupee cash in the first place. The tribunal deleted the addition in full: a non-resident’s foreign earnings repatriated to India are outside the charge of section 5(2).

The bank records that settled it were eight to nine years old when produced in the appeal.

A decade of statements

Rajnish Kasturchand Ostwal v. ITO (International Taxation) · ITAT Mumbai · [2025] 180 taxmann.com 628 · case report

The assessee had worked in Dubai since 2001. In AY 2016-17 he bought a Rs 2 crore residential property in Mumbai. Years later the case was reopened under section 148 and the entire purchase was treated as unexplained investment under section 69.

What won the case: Dubai bank statements, authorised dealer certificates from the remittance service providers, and NRE account inward credit records, together tracing every rupee from Dubai salary savings to the property payment. The tribunal held that a complete fund trail had been furnished, and that income earned abroad by a non-resident is not taxable in India and “cannot be brought to tax indirectly through a deeming fiction under Section 69”.

Defending a 2016 purchase in 2025 took banking records reaching back toward employment that began in 2001. He had them.

The missing receipt

Sanobar Ajaz Ahmed Saudagar v. ITO · ITAT Mumbai · AY 2016-17, reported July 2026 · case report

This is the closest call of the five, and the most instructive. The assessee purchased a Rs 1.40 crore flat; her NRI husband paid Rs 80 lakh of it directly to the seller through a Dubai exchange house. When the year was reopened, the Assessing Officer added Rs 80.10 lakh under section 69, resting on one specific ground: after nearly a decade, she could not produce the exchange house’s remittance record.

What won the case: everything else. The registered sale deed. The seller’s bank statement confirming receipt of the Rs 80 lakh. The husband’s passport, identity documents and income records. A gift deed and affidavit confirming the payment. The bank’s confirmation naming the husband as remitter. TDS records, and even the Rs 10,000 pay order. The tribunal held that the absence of a single remittance document, almost ten years on, could not override the substantial documentary evidence establishing the source and use of the funds, and deleted the addition.

She won despite the gap only because the rest of the file was complete. One missing paper had put Rs 80 lakh in play; nine surviving papers took it back out.

When records run out

The same benches decide the other kind of case too. In Shobha Harish Thawani v. JCIT (ITAT Mumbai, [2023] 154 taxmann.com 564), the assessee held a 40% share in an overseas fund investment, declared the income from it, but did not disclose the asset in Schedule FA for three consecutive years and brought nothing on record to explain the repeated omission. The penalty was upheld. Three silent years read very differently from Pandya’s one documented slip.

And in Rajendra Maganbhai Patel v. ACIT (ITA Nos. 105 & 106/Ahd/2023, ITAT Ahmedabad, 4 March 2025), a single order split down the middle: remittances backed by documentation of their foreign origin were accepted, and the tranches without underlying records were not. Same taxpayer, same judgment, same law. The line between the amounts that survived and the amounts that did not was documentation, and nothing else.

What to keep

Put the five wins side by side and they dictate a checklist. If you have foreign assets or foreign income, these are the documents that have actually decided cases:

• NRE and foreign bank statements, every year, both sides of every large transfer. They defeated the Rs 86 lakh “cash” addition and anchored the Rs 2 crore property case.
• Remittance evidence: authorised dealer certificates, wire transfer advices, FIRC, exchange house receipts. The one document nobody could re-obtain after a decade was exactly this kind.
• Form 16 with its Part B annexure, and Form 12BA. The perquisite annexure answered four years of ESOP penalties.
• Filed returns, including Schedule FA, for every year. Pandya’s prior-year and later-year schedules proved the missed year was a slip, not a scheme.
• Foreign employment records: salary slips, employment contracts, foreign tax returns. They establish both the source of funds and the residency story behind section 5(2).
• Property papers beyond the sale deed: the seller’s receipt or bank confirmation, payment instruments, TDS records. In Saudagar these carried the case when the remittance receipt was gone.
• Passport pages and travel history. Residential status is the foundation of every NRI defence, and the passport is its primary evidence.

Not sure whether Schedule FA applies to you at all? Our free Schedule FA checker answers that in about two minutes, and the guide to NRI tax notices explains why these questions are arriving more often.

Where to keep them

Now the uncomfortable arithmetic. Most returns can currently be reopened for about five years under the Finance (No. 2) Act, 2024, and returns filed before September 2024 fall under the earlier, longer windows. But foreign income and foreign assets have no reassessment time limit under the Black Money Act. Every case above was decided eight to thirteen years after the underlying documents were created. Employers change payroll providers, banks purge statement archives, exchange houses close. The department does not need your documents to raise a demand; you need them to answer one.

So the practical rule for anyone with a foreign asset is simple: the day a document is created is the day to put it somewhere it will still exist in ten years. Not an email attachment, not a laptop folder, not a drawer.

Disclaimer. This article summarises published tribunal orders and reports for general information, current at publication. Case outcomes turn on their specific facts, and summaries necessarily compress them. Nothing here is legal or tax advice; consult a qualified chartered accountant for your situation. All cases cited are public judicial records, linked to the order or a published report.