“unexplained investment”

Cash Credits & Unexplained ItemsSection 69Section 695,821 judgments

The decision most relied on for unexplained investment is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on unexplained investment

Sumati Dayal v. CIT

214 ITR 801 · 1995 · Supreme Court

1,967

citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

K.P. Varghese v. ITO

131 ITR 597 · 1981 · Supreme Court

989

citing judgments

An addition to income cannot be made merely on the basis of a difference in valuation of assets or a Valuation Officer's report without establishing actual understatement of consideration or the source of unexplained funds through proper enquiry. The Assessing Officer must conduct proper enquiry and satisfy the conditions for making such additions.

Chuharmal v. CIT

172 ITR 250 · 1988 · Supreme Court

340

citing judgments

The expression 'income' under Section 69A of the Income-tax Act, 1961, has a wide meaning, encompassing anything that comes in or results in gain. Therefore, an assessee's unexplained investments, such as purchasing articles or depositing cash, can legitimately be inferred and deemed as income under this section.

CIT v. Kamdhenu Steel & Alloys Ltd.

361 ITR 220 · 2014 · High Court

328

citing judgments

When making an addition under section 68, the creditworthiness or financial strength of an investor contributing share capital or share application money can be proved by producing their bank statements showing sufficient balance for the investment. The Supreme Court dismissed the SLP against this decision.

CIT v. Dwarkadhish Investment (P) Ltd.

330 ITR 298 · 2011 · High Court

218

citing judgments

An assessee cannot be asked to explain the source of the source for cash credits, particularly share capital or share application money, once they have discharged the initial onus regarding the identity, genuineness of the transaction, and creditworthiness of the immediate investor.

CIT v. Jansampark Advertising & Marketing (P.) Ltd.

56 Taxmann.com 286 · 2015 · High Court

196

citing judgments

The Commissioner of Income-tax (Appeals) has an independent statutory obligation to conduct proper inquiries and verify facts, especially when the Assessing Officer has failed to do so. The CIT(A) must ensure effective inquiry is carried out before deleting additions or accepting additional evidence.

ITO v. Ch. Atchaiah

218 ITR 239 · 1996 · Supreme Court

149

citing judgments

Under the Income-tax Act, 1961, the Assessing Officer must tax any taxable income in the hands of the correct assessee to whom it truly belongs, having no option to assess it in any other person's hands.

CIT v. Stellar Investment Ltd.

192 ITR 287 · 1991 · High Court

146

citing judgments

Once the identity of the shareholders is established, no addition can be made in the hands of the assessee company under Section 68 for share capital or share application money, as it cannot be treated as undisclosed income.

Judgments citing unexplained investment

Moti Ram Bairwa, Bassi, Jaipur vs. Income Tax Officer, Jaipur

In the result the appeal of the assessee is allowed for statistical purposes

ITA 1504/JPR/2024[2016-17]Status: DisposedITAT Jaipur24 Apr 2025AY 2016-17

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. Deevan Agarwal, CA, Ld. ARFor Respondent: Mrs. Swapnil Parihar, JCIT, Ld. DR

Section 139(4)Section 250Section 56(2)(vii)Section 69

case. 3. The AO erred in law and on facts by making an addition of Rs. 30,32,230/- under Section 69 as unexplained investment. The payment was duly accounted for, supported by evidence, and sourced from the sale proceeds of exempt agricultural land. 4. The AO erred ... detailed deliberation between the assessee and the AO, the case of the assessee was assessed after making addition of Rs. 30,32,230/- as unexplained investment u/s. 69 of the Act, Rs. 14.41 Lacs as unexplained investment u/s. 69 of the Act and addition under the head other sources amounting

Deputy Commissioner of Income Tax, Central Circle-1, Ludhiana vs. Gpg Cattle Feed Pvt. Ltd., Moga

In the result, the Revenue appeal is partly allowed and the Cross Objection of

ITA 210/CHANDI/2024[2018-19]Status: DisposedITAT Chandigarh24 Apr 2025AY 2018-19

For Appellant: Shri Rupinder Kansal, Advocate andFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR

Section 115BSection 133ASection 69

purchase invoices, transportation challans, or bank entries had been furnished to establish the source of the excess stock, treated the surrendered amount as unexplained investment under Section 69 of the Act and taxed the same at the rate prescribed under Section 115BBE. The books of accounts of the assessee were ... pending reconciliations with creditors, debtors, and banks at the time of the survey. Hence, the discrepancy was purely like a stock difference, not an unexplained investment. The assessee further emphasized that the surrender was voluntary, made without coercion or pressure from the survey team, and accompanied by an undertaking

Datta Jayaram Garad, Gadhanpura, Dist. Beed vs. The Income Tax Officer, Ward 1(5), Aurangabad

In the result, appeal of the assessee is allowed for statistical purposes

ITA 2727/PUN/2024[2011-2012]Status: DisposedITAT Pune24 Apr 2025AY 2011-2012

Bench: Dr. Manish Borad & Ms. Astha Chandraआयकर अपील सं. / Ita No.2727/Pun/2024 धििाारण वषा / Assessment Year: 2011-2012 Vs Ito, Ward- Datta Jayaram Garad, Near Municipal 1(5), Corporation, Main Road, Aurangabad Gadhanpura, Tq. Majalgaon, Dist. Beed- 431131 Maharashtra Pan-Aphpg1705Q Appellant Respondent

For Appellant: NoneFor Respondent: Shri Akhilesh

Section 144Section 147Section 148Section 234ASection 250Section 271(1)(c)Section 69

grounds of appeal:- 1. "The order passed is illegal, invalid and bad in law. 2 2. The addition of Rs. 40,00,000/- as unexplained investment u/s 69 of the Income Tax Act, 1961 is incorrect and unjustifiable. 3. The leamed assessing officer erred in passing the said assessment order ... Thus, in the absence of any submission on the part of the appellant, the A.O. treated Rs.40 lakh in purchased property as unexplained investment u/s 69 of the Act and made addition of Rs. 40 lakh. During the appellate proceedings submission filed through online mode, the appellant stated that

Laxminarayan Malani, Hyderabad vs. ITO., Ward-4(1), Hyderabad

In the result, appeal of the Assessee is allowed

ITA 315/HYD/2025[2012-2013]Status: DisposedITAT Hyderabad24 Apr 2025AY 2012-2013

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA Sridhar JhawarFor Respondent: Shri Srikanth Reddy Y. Sr. AR

Section 139Section 142(1)Section 144Section 147Section 148Section 251(1)(a)

determined the total income of the assessee at Rs.42 lakhs by making addition of Rs.42 lakhs towards source for the purchase of property as unexplained investment. 3 ITA.No.315/Hyd./2025 3. Being aggrieved by the assessment order, the assessee preferred an appeal before the Tribunal. Before the learned ... Jhawar, Learned Counsel for the Assessee submitted that, the learned CIT(A) has erred in sustaining the addition made by the Assessing Officer towards unexplained investment in purchase of property even though the assessee has filed relevant evidences in response to notice issued u/sec.142(1) of the Act by filing

Sanghi Textiles Private Limited, Hyderabad vs. Income Tax Officer, Ward-3(1), Hyderabad

In the result, appeal of the assessee is allowed for statistical purposes

ITA 759/HYD/2024[2014-15]Status: DisposedITAT Hyderabad24 Apr 2025AY 2014-15

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA P Murali Mohan RaoFor Respondent: Shri Srinath Sadanala, Sr. AR

Section 144BSection 147Section 194ASection 194CSection 271BSection 44ASection 69B

explain the source of cash received during the year under consideration, the Assessing Officer treated the whole amount of Rs.19,54,348/- as unexplained investment and was added to income of assessee under section 69B of the Income Tax Act, 1961. Further, the appellant-company was unable to justify

Raj Kumar Puglia, Birbhum vs. ITO, Ward - 3(4), Suri

In the result, the appeal of the assessee is allowed

ITA 2638/KOL/2024[2012-13]Status: DisposedITAT Kolkata24 Apr 2025AY 2012-13

Bench: Shri Rajesh Kumar, Am Ito, Ward - 3(4) Raj Kumar Puglia Aayakar Bhawan, Lalkuthi Para, Old Kandi Road, Sainthia, Suri, Birbhum, Vs. Birbhum, West Bengal, 731234 West Bengal, 731101 (Appellant) (Respondent) Pan No. Akdpp5708P Assessee By : Shri Dilip Chatterjee, Ar Revenue By : Shri Madhumita Das, Dr Date Of Hearing: 17.04.2025 Date Of Pronouncement : 24.04.2025

For Appellant: Shri Dilip Chatterjee, ARFor Respondent: Shri Madhumita Das, DR

Section 133(6)Section 143(1)Section 143(3)Section 69

found that there was a difference of ₹12,10,038/-. Accordingly, the stock reflected in hypothecated statement filed before the Bank was treated as unexplained investment in terms of section 69 of the Act and added to the income of the assessee in the assessment framed

Suprakash Saha, Baguihati vs. D.C.I.T., Circle - 52(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 2266/KOL/2024[2013-2014]Status: DisposedITAT Kolkata24 Apr 2025AY 2013-2014

Bench: Shri Rajesh Kumar, Am

For Appellant: Shri Sunil Surana, ARFor Respondent: Shri Madhumita Das, DR

Section 147Section 148Section 69

assessee duly replied the said notices. The Id. AO finally made the addition of ₹16,36,800/- u/s 69 of the Act as unexplained investment. In the appellate proceedings, the Id. CIT (A) confirmed the addition. 06. I note that the assessee is a retired employee of Government of India

Thiruvambalam, Thanjavur vs. ACIT, Circle-2(1), Trichy

In the result, both the appeals filed by the assessee are

ITA 518/CHNY/2025[2012-13]Status: DisposedITAT Chennai24 Apr 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunatha

For Appellant: Mr. N. Arjun Raj, AdvocateFor Respondent: Ms. Anitha, Addl.CIT

Section 143(3)Section 148Section 271(1)(c)

prove source of investment made in the property at T.Nagar, Chennai before the AO. Therefore, AO made addition of Rs.62,54,875/- towards unexplained investment and also levied penalty @ 100% amounting to Rs.40,96,611/- u/s.271(1)(c) of the Act vide order dated 05.02.2022. 4. Assessee further challenged

Thiruvambalam, Thanjavur vs. ACIT, Circle-2(1), Trichy

In the result, both the appeals filed by the assessee are

ITA 517/CHNY/2025[2012-13]Status: DisposedITAT Chennai24 Apr 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunatha

For Appellant: Mr. N. Arjun Raj, AdvocateFor Respondent: Ms. Anitha, Addl.CIT

Section 143(3)Section 148Section 271(1)(c)

ACIT Circle-24(1), Piramal Chamber vs. Raiees Yasin Lashkaria, Andheri West

In the result, the appeal of the revenue is dismissed

ITA 5457/MUM/2024[2020-21]Status: HeardITAT Mumbai24 Apr 2025AY 2020-21

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No. 4450/Mum/2024 (निर्धारण वर्ा / Assessment Year :2011-12) आयकर अपील सं./Ita No. 5457/Mum/2024 (निर्धारण वर्ा / Assessment Year :2020-21)

For Appellant: Shri Dipesh RupareliaFor Respondent: Smt. Sanyogita Nagpal

Section 133(6)Section 143(3)Section 250Section 56(2)(x)

circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs.5,54,000/- on account of unexplained investment, representing 1% of the investment remained with assessee, as per sale agreement, on sale of rights in Shardha Dahisar projectto Rose Developers Pvt. Ltd having ... were made by the Ld. AO: i. Addition on account of sale of property as reflected in AIR – Rs. 1,14,28,026/- ii. Unexplained investment u/s 69B – Rs. 5,54,000/- iii. Unexplained expenditure u/s 69C – Rs. 8,01,848/- 4. (i) The assessee is a proprietor

ACIT, Circle 24(1) Mubai, Mumbai vs. Raiees Yasin Lashkaria, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 4450/MUM/2024[2011-12]Status: DisposedITAT Mumbai24 Apr 2025AY 2011-12

For Appellant: Shri Dipesh RupareliaFor Respondent: Smt. Sanyogita Nagpal

Section 133(6)Section 143(3)Section 250Section 56(2)(x)

Jitender Singh, Haridwar vs. DCIT, Circle- Haridwar, Haridwar

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 29/DDN/2024[2013-14]Status: DisposedITAT Dehradun23 Apr 2025AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri M. Balaganesh(Through Video Conferencing) Shri Jitender Singh, Vs. Dcit, Village-Jagjeetpur, Po Circle, Kanghal, Haridwar Haridwar (Appellant) (Respondent) Pan: Ahaps4448R

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Shri A. S. Rana, Sr. DR

Section 133ASection 142ASection 143(3)Section 254Section 69

whether the ld CIT(A) was justified in confirming the action of the ld AO in making addition on account of unexplained investment in hospital building in the facts and circumstances of the instant case. Shri Jitender Singh 3. We have heard the rival submissions and perused the material available ... caused as to why the difference in value of cost of construction of Rs. 3,08,10,300/- be not brought to tax as unexplained investment u/s 69 of the Act. The assessee responded that the DVO had applied CPWD rates as against adoption of local PWD rates. Further, determination

Liju Jose, Kottayam vs. Income Tax Officer Ward 5 Kottayam, Kottayam

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 175/COCH/2025[2017-18]Status: DisposedITAT Cochin23 Apr 2025AY 2017-18

Bench: Shri Inturi Rama Rao

For Appellant: Sri.Prasanth Srinivas, CAFor Respondent: Smt.Leena Lal, Senior AR

Section 143(3)Section 69

that the appellant had made cash deposit in SBN of Rs.41,000, during demonetization period, AO made addition of the same treating it as unexplained investments u/s.69 of the Act. The AO also made an addition of Rs.3 lakh on account of lower net profit. Accordingly, the AO made

Hajaria Soft Services Private Limited, Lucknow vs. Income Tax Officer-3(2), Lucknow

In the result, the appeal of the assessee is dismissed

ITA 74/LKW/2025[2017-18]Status: DisposedITAT Lucknow23 Apr 2025AY 2017-18

Bench: Shri Anadee Nath Misshraआयकर अपील सं/ Ita No.74/Lkw/2025 "नधा"रण वष"/ Assessment Year: 2017-18 Hajaria Soft Services Pvt Ltd Income Tax Officer-3(2) V. A-1462, Sec-1, Lda Colony, Lucknow-New Kanpur Road Ashiyana, Pratyaksh Kar Bhawan, Lucknow-226012. 57, Ram Tirath Marg, Hazratganj, Lucknow- 226001. Pan:Aadch6101R अपीलाथ"/(Appellant) ""यथ"/(Respondent) अपीलाथ" "क और से/Appellant By: None ""यथ" "क और से /Respondent By: Shri Sanjeev Krishna Sharma, Addl. Cit(Dr) आदेश / O R D E R Per Anadee Nath Misshra, A.M.: The Present Appeal Has Been Filed By The Assessee Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi Dated 05/08/2024 For The Assessment Year 2017-18. The Grounds Of Appeal Of The Assessee Are As Under: -

For Appellant: NoneFor Respondent: Shri Sanjeev Krishna Sharma, Addl

Section 69Section 80J

addition of Rs.4,97,513/- was made by the AO. Further, an addition of Rs.21,00,000/- was also made on account of unexplained investment under section 69 of the Income Tax Act, 1961 (“the Act”, for short). The assessee filed appeal against the aforesaid assessment order wherein the aforesaid ... deduction u/s 80JJAA, made addition of Rs. 4,97,513/- on account of disallowance of other expenses and of Rs 21,00,000/- as unexplained investment u/s 69. 8. During the appeal proceedings the appellant has been provided more than sufficient opportunities but appellant failed to submit any submission

Gulubhai Mahendrabhai Patel, Ahmedabad vs. ITO Ward-5(3)(1) Ahmedabad, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 923/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad23 Apr 2025AY 2013-14

Bench: Smt. Annapurna Gupta

For Appellant: Shri S. N. Divatia, A.RFor Respondent: Shri Prateek Sharma, Sr. DR

Section 250Section 263Section 69

NFAC, Delhi (for short “CIT(A))” upholding the addition of Rs. 23,98,500/- made by A.O towards purchase of agricultural land as unexplained investment u/s 69 is wholly illegal, unlawful and against the principles of natural justice. 2. The ld. CIT(A) has grievously erred ... erred in law and or on facts in upholding the addition of Rs.23,98,500/- made by A.O. towards purchase of agricultural land as unexplained investment u/s 69. Gulubhai Mahendrabhai Patel vs. ITO Asst.Year –2013-14 4. That the in the facts and circumstances of the ld. CIT(A) ought

Kanchan Chandar Wadhwani, Pune vs. ITO Ward 8(3), Pune

In the result, appeal of the assessee is allowed for statistical purposes

ITA 612/PUN/2025[2017-18]Status: DisposedITAT Pune23 Apr 2025AY 2017-18

Bench: Dr. Manish Borad & Ms. Astha Chandraआयकर अपील सं. / Ita No.612/Pun/2025 धििाारण वषा / Assessment Year: 2017-2018 Vs Ito, Ward 8(3), Kanchan Chandar Wadhwani, Pune 123, Pune, Pune H.O. Haveli, Pune-411001 Maharashtra Pan-Adjpw1580B Appellant Respondent

For Appellant: NoneFor Respondent: Shri Akhilesh

Section 144Section 44ASection 69

Assessing Officer [ITO Ward 8(4)] has erred in law and in facts in treating amount of Rs. 14,96,500/- as unexplained investment u/s 69 of the 1.T Act without taking into consideration the fact that appellant has already given clarification regarding the cash deposits made

Govardhan Naidu Chintakunta, Hyderabad vs. ITO., Ward - 1, Proddutur

ITA 435/HYD/2025[2011-12]Status: DisposedITAT Hyderabad23 Apr 2025AY 2011-12

Bench: Us :

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Y. Srikanth Reddy, Sr.DR

Section 142(1)Section 143(3)Section 271A

Unexplained cash found from the assessee’s residential premises during the course of search proceedings: Rs. 3,88,000/-; and (iii) Unexplained investment in jewellery: Rs. 16,01,975/-. 3. On further appeal, the Tribunal remitted the matter relating to the Long-Term Capital Gain (“LTCG”) arising from the sale

Prashanth Paramahans Manik, Bangalore vs. Income Tax Officer, Ward-5(3)(3), Bengaluru

In the result, the appeal of the assessee is hereby partly allowed

ITA 1716/BANG/2024[2017-18]Status: DisposedITAT Bangalore23 Apr 2025AY 2017-18

Bench: Shri Waseem Ahmedassessment Year: 2017-18

For Appellant: Shri Zain Ahmed Khan, CAFor Respondent: Shri Ganesh R Gale, Standing Counsel for Dept

Section 11Section 127Section 143(2)Section 234BSection 69Section 80C

order. 7. Without prejudice to the above grounds, the Ld. AO erred in bringing to tax a sum of Rs. 25,50,000 as "Unexplained Investment' u/s. 69 of the I.T. Act and the Ld. CIT(A) erred in confirming the same. 8. The Ld. AO erred in ignoring

Mukesh Kumar Bhawarlal Jain, Mumbai vs. ITO, WD 23(2)6, Mumbai

In the result, additional ground no

ITA 6745/MUM/2024[2016-17]Status: DisposedITAT Mumbai23 Apr 2025AY 2016-17

Section 144BSection 147Section 148Section 148ASection 151Section 250Section 254(1)Section 69A

Income Tax Act, 1961 treating the cash deposited in account maintained with M/s. Shri Renuka Mata Multi State Urban Co-op. Credit Soc. as unexplained investment. Ground 2: The order made u/s 147 r.w.s.144 read with section 144B of the Income Tax Act, 1961 by the learned Assessing Officer

Mmtc Ltd vs. DCIT, Circle-5(1)

In the result, the assessees’ appeals are allowed

ITA 216/DEL/2005[1999-2000]Status: DisposedITAT Delhi23 Apr 2025AY 1999-2000

Bench: SHRI M. BALAGANESH (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

Section 120Section 127Section 12ASection 143Section 3

Matharoo in systematic tax evasion i.e. raising funds from public through cash and cheque, siphoning of funds from trusts/ societies for personal use and unexplained investments. The cases belonging to Smt Sudha Gupta and Shri Devendra Gupta group including the assessee were centralized to Central Circle 29 from Circle (Exemptions