ITAT allows benefit of the cash bought at the time of migration from Pakistan

Benefit of the cash bought at the time of migration from Pakistan allowed as assessee fulfilled conditions of CBDT Circular

In a recent judgment, ITAT has allowed the benefit of the cash and jewellery bought by the assessee at the time of migration from Pakistan to India.

ABCAUS Case Law Citation:
5193 (2026) (08) abacus.in ITAT

The appellant assessee in this case was aggrieved by the action of the CIT(A) in not allowing the benefit of the cash and jewellery bought by him at the time of migration from West Pakistan to India and further enhancing the addition made by the Assessing Officer (AO).

The assessee was a West Pakistan resident and migrated to India. The assessee filed a declaration before the Assessing Officer as required vide CBDT Circular F. No. 73/16/68IT(A-II) whereby, the assessee intimated to the AO that he has brought a cash of approx. Rs. 20 Lakhs and 20 Tolas of Gold jewellery. However, the AO reopened the assessment of the assessee and held that the cash brought from Pakistan was taxable in India and made the addition towards cash amount.

Aggrieved, the assessee filed appeal before the CIT(A) and submitted that he had duly filed the declaration as required by the CBDT Circular. However, the CIT(A) noted that though the assessee had filed the declaration and had also showed that he was possessed of sufficient resources including the Pakistani Behbood Bonds.

However, the CIT(A) noted that the assessee had not produced the evidences that how the Pakistani currency was converted by the assessee in India and further if the jewellery was sold, to whom the said jewellery was sold and that the assessee had not produced the requisite bills and vouchers of sale of such jewellery.

The CIT(A) further noted that there was frequent transactions in the bank accounts of the assessee of withdrawals and credits. The CIT(A) added the entire credits and thereby enhanced the addition to that extent invoking the provisions of section 69A of the Income Tax Act. 

The Tribunal observed that perusal of the CBDT Circular reveal that the assessee has to show that it was possessed of sufficient resources and funds to cover the money and jewellery brought into India. The assessee in the present case had duly demonstrated before the CIT(A) that he was possessed of sufficient resources. However, the CIT(A) went on to examine that the assessee has not shown proof of conversion of Pakistani currency into the Indian currency etc.

The Tribunal observed that undisputedly the assessee had migrated to India. The assessee had filed declaration as required under Circular. The assessee had proved that it was possessed of sufficient resources to cover the money and jewellery brought to India. Therefore, all the requirements of the CBDT Circular were complied with.

The Tribunal held that under the circumstances, there was no justification on the part of the CIT(A) either in confirming or enhancing the income of the assessee, especially, when CIT(A) had ignored the withdrawal entries and concentrated only on credit entries.

Accordingly, the Tribunal set aside the impugned order of the CIT(A) and the additions were deleted.

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