A Dubai-based NRI invested Rs 2 crore in a Mumbai property but did not file an Income Tax Return (ITR) in India for that year, as he had no taxable income here. The Income Tax Department treated the investment as “unexplained money” and reopened his case.

However, the Income Tax Appellate Tribunal (ITAT), Mumbai, ruled in his favour, making it an important case study for NRIs investing in India.

This case highlights a simple but critical principle: foreign salary savings remitted through proper banking channels cannot be treated as unexplained income in India merely because no ITR was filed.