When Mr Agarwal originally from Goregaon East, but now living in Hong Kong for the past 15 years, gave his father Rs 5 lakh by withdrawing cash from his NRE account, he had no idea that this would entangle him in a dispute with the Income Tax Department in India.
In this case, his father deposited the cash given by Agarwal in his own savings account and later withdrew it to buy an insurance policy in his son (Agarwal's) name by paying cash. This event trigged a red flag in the he Income Tax Department's system and since they were unaware of their family arrangement, they sent Agarwal a tax notice.
