“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

Income Tax Officer, Ward-2(1), Vijayawada vs. Ahmed Ejaz, Vijayawada

In the result, appeal filed by the Revenue is dismissed

ITA 462/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam07 Mar 2025AY 2017-18

Bench: Shri K Narasimha Chary, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./ I.T.A. 462/Viz/2024 (ननधधारण वर्ा / Assessment Year : 2017-18) Income Tax Officer, Vs. Ahmed Ejaz, Ward-2(1), Vijayawada. Vijayawada. Pan: Aakpe6675R (अपीलधथी/ Appellant) (प्रत्यथी/ Respondent) अपीलधथी की ओर से/ Assessee By : Sri Mv Prasad, Ar प्रत्यधथी की ओर से / Revenue By : Dr. Aparna Villuri, Sr. Ar

For Appellant: Sri MV Prasad, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 143(3)Section 153C

documents and the confirmation by the Managing Director of M/s. Yugandhar Housing Private Limited, the Ld. AO made addition of Rs. 90 lakhs as unexplained investment and added the same to the total income of the assessee while framing the assessment U/s. 143(3) of the Act. Aggrieved

Bannavatu Tulasi, Kanchikacherla vs. Income Tax Officer, Ward-1(1), Vijayawada

In the result, appeal of the assessee is allowed

ITA 451/VIZ/2024[2015-16]Status: DisposedITAT Visakhapatnam07 Mar 2025AY 2015-16

Bench: Shri K Narasimha Chary, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./ I.T.A. 451/Viz/2024 (ननधधारण वर्ा / Assessment Year : 2015-16) Baanavatu Tulasi, Vs. Income Tax Officer, M.P.P. School, Kopthapet, Ward-1(1), Kanchikacherla, Vijayawada. Krishna-521180. Pan: Afcpt1634C (अपीलधथी/ Appellant) (प्रत्यथी/ Respondent) अपीलधथी की ओर से/ Assessee By : Sri Mv Prasad, Ar प्रत्यधथी की ओर से / Revenue By : Dr. Aparna Villuri, Sr. Ar

For Appellant: Sri MV Prasad, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 139Section 142(1)Section 143(2)Section 147Section 148Section 24Section 69

entire sale consideration in cash. Thereafter, the Ld.AO proceeded to tax Rs.93,37,000/- [Rs. 1,19,77,000 – Rs.26,40,000] as unexplained investment U/s. 69 of the Act. On appeal, before the Ld. CIT(A), the assessee reiterated the similar submissions made before the Ld. AO. However

Sunkara Kotipalli Naidu, Visakhapatnam vs. The Income Tax Officer, Ward (International Taxation), Visakhapatnam

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

ITA 299/VIZ/2024[2016-17]Status: DisposedITAT Visakhapatnam07 Mar 2025AY 2016-17

Bench: Shri K. Narasimha Chary, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपीलसं./I.T.A.No.299/Viz/2024 (निर्धारण वर्ा/ Assessment Year: 2016-17) Sunkara Kotipalli Naidu V. Income Tax Officer –Ward- Chettupalli Village (International Taxation) Narsipatnam Mandal Income Tax Office Visakhapatnam Infinity Towers Andhra Pradesh – 531116 Sankaramatam Road Visakhapatnam [Pan: Dzdps4163R] Andhra Pradesh,530016 (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 142(1)Section 144(5)Section 147Section 148Section 148ASection 69

Dispute Resolution Panel ought to have directed the assessing officer to delete the following additions made u/s 69 of the Act towards unexplained investment: i) Addition of Rs.28,30,700 towards purchase of flat on 10.02.2016 vide Doc no.950/2016. ii) Addition of Rs.30,74,750 towards purchase of site

Saroj Dewan, H.No 33 Shakti Nagar, Yamuna Nagar, Haryana vs. Ward-4, Yamuna Nagar, Jurisdiction Assessing Officer, Haryana

In the result, appeal of the assessee is partly allowed

ITA 720/CHANDI/2024[2012-2013]Status: DisposedITAT Chandigarh07 Mar 2025AY 2012-2013

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR

Section 131Section 148Section 151Section 69

made by the Ld.AO. 6. That the Worthy CIT(A), NFAC, Delhi has erred in confirming the addition of 17,44,450/- as unexplained investment u/s 69 of the Act. 7. That no cognizance has been given to the submissions as well as Affidavits filed by the Assessee. 8. That ... credits in her own bank account and is thus the owner of such unaccounted money. Further. she has not satisfactorily explained the source of unexplained investment in the property. The AO has made addition on account of unexplained investment in the property. The ownership of property is not doubted, onus

Biharibhai Gokalbhai Patel, Anand vs. The ACIT, Intl. Taxn., Vadodara

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

ITA 1849/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2016-17

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumarassessment Year : 2016-17 Biharibhai Gokalbhai Patel Acit, Cir.Int-Taxation 17, Sardar Patel Market Vs Vadodara. Dairy Road, Anand 388 001 Gujarat. Pan : Apopp 8402 L (Applicant) (Responent) : Assessee By Shri Darshan Belani, Ar Or Shri S.R Shah, Ca Revenue By : Smt.Malarkodi, R., Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 04/03/2025 घोषणा क" तारीख /Date Of Pronouncement: 07/03/2025

For Respondent: Smt.Malarkodi, R., Sr.DR

Section 143(3)Section 234ASection 250Section 69

facts of the case by confirming the addition of Rs.2,04,97,450/-u/s.69 of the Income-tax Act, 1961 ('the Act') as unexplained investments by the learned Assessing Officer('the learned AO'). 2. i) The Hon'ble CIT-A erred in law and facts of the case by rejecting

Heaven Associate, Gandhinagar vs. The ITO, Ward-2, Gandhinagar

In the result, the appeal of the assessee is allowed in above terms

ITA 1694/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2013-14

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumarassessment Year : 2013-14 Heaven Associate Ito, Ward-2 C/O. Akshat Heaven Vs Gandhinagar. Opp: Sahjanand City Kudsasan Gandhinagar 382 421. Pan : Aagfh 8119 R (Applicant) (Responent) : Assessee By Shri Prashant S. Pandit, Ar : Shri Ragnesh Das, Sr.Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 03/03/2025 घोषणा क" तारीख /Date Of Pronouncement: 07/03/2025 आदेश/O R D E R आदेश आदेश आदेश

Section 143(3)Section 147Section 148Section 250Section 69

framed on the assessee, and addition made to its income of Rs.2,08,05,352/- under section 69 of the Act on account of unexplained investment, being the difference in the figure of Advance for sale of land and WIP recorded by the assessee in its Books of accounts ... raised huge demand of Rs. 1,15,71,970/-by determining total income of Rs.2,08,05,352/- on account of unexplained investment u/s 69 of the Act, ignoring the fact that appellant has duly disclosed both WIP and advance payment in its Balance Sheet. Hence, unfair addition needs

Subba Reddiar Rajendran, Thirunelveli, Thiruvengadam vs. Assistant Commissioner of Income Tax, Circle 1, Tirunelveli, Income Tax Office

In the result the appeal of the assessee is partly allowed

ITA 27/CHNY/2025[2017-2018]Status: DisposedITAT Chennai07 Mar 2025AY 2017-2018

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकर अपील सं./Ita No.: 27/Chny/2025 यनिाारण वर्ा / Assessment Year: 2017-18 Assistant Commissioner Of Subba Reddiar Rajendran, V. Income Tax, No.233, Kalugumalai Road, Circle -1, Thiruvegadam, Tirunelvelli. Thirunelveli – 627 719. [Pan: Abmpr-4211-M ] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Mr. T. Vasudevan, Advocate प्रत्यथी की ओर से/Respondent By : Ms. Anitha, Addl. Cit सुनवाई की तारीख/Date Of Hearing : 14.02.2025 घोर्णा की तारीख/Date Of Pronouncement : 07.03.2025 आदेश /O R D E R

For Appellant: Mr. T. Vasudevan, AdvocateFor Respondent: Ms. Anitha, Addl. CIT

Section 44A

capital account after reducing the current year profit amounting to Rs.1,51,82,506/- and brought to tax u/s.69 of the Act as unexplained investment by passing an order u/s.143(3) of the Act on 25.12.2019. The assessee contested the AO’s order before the learned CIT(A), NFAC, Delhi ... submissions the ld.AR stated that the AO and that of ld.CIT(A) have erred in making the addition of Rs.1,51,82,506/- as unexplained investment on account of the difference identified in the capital account opening and closing balances as on 31.03.2016 and 01.04.2016 from the return of income

Sudha Ramani, Chennai vs. Income Tax Officer, Non Corporate Ward 10(3), Chennai

In the result, the appeal filed by the assessee is allowed

ITA 3352/CHNY/2024[2010-11]Status: DisposedITAT Chennai07 Mar 2025AY 2010-11

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.3352/Chny/2024 िनधा"रण वष"/Assessment Year: 2010-11 Sudha Ramani, Vs. The Income Tax Officer, Flat A3, 862, Siddharth Manor, Non Corporate Ward 10(3), Poonamallee High Road, Kilpauk, Chennai. Chennai 600 010. [Pan:Ahepr9857M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Venkata Raman, C.A. ""थ" की ओर से/Respondent By : Shri A. Sasikumar, Cit सुनवाई की तारीख/ Date Of Hearing : 25.02.2025 घोषणा की तारीख /Date Of Pronouncement : 07.03.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 17.10.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2010-11. 2. The Assessee Raised 3 Grounds Of Appeal, Amongst Which, The Only Issue Emanates For Consideration As To Whether The Ld. Cit(A) Is Justified

For Appellant: Shri R. Venkata Raman, C.AFor Respondent: Shri A. Sasikumar, CIT

Section 147Section 251(1)(a)

reopened in order to verify the investment in the immovable property. The reassessment was completed, inter alia, making addition of ₹.30,00,000/- towards unexplained investment, under section 147 r.w.s. 144 of the Income Tax Act, 1961 [“Act” in short]. We note that out of total investment ... Assessing Officer treated only a sum of ₹.30,00,000/- as unexplained investment. 4. Having aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A) by filing a petition under Rule 46A of Income Tax Rules, 1962 for admission of additional evidence

Priyal Jatin Manik, Mumbai vs. Income Tax Officer Ward 34(3)(2), Mumbai

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

ITA 396/MUM/2025[2018-19]Status: DisposedITAT Mumbai07 Mar 2025AY 2018-19

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2018-19

For Appellant: Shri Vishal Shah and Ms. Bhavisha Jain, ARsFor Respondent: Shri R. A. Dhyani, CIT DR

Section 144Section 250Section 69

Income of Rs. 15,65,598/- by confirming an addition of Rs. 14,27,21,754/- made by the Assessing Officer on account of unexplained Investment u/s 69 r.w.s. 1158BE, which is bad in law. 3. On the facts and circumstances of the case and in law, the leamed Commissioner

Shalini Jagwayan, Jaipur vs. ITO Ward 4(4), Jaipur

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

ITA 987/JPR/2024[2011-12]Status: DisposedITAT Jaipur06 Mar 2025AY 2011-12

For Appellant: Shri Shrawan Kumar Gupta, AdvFor Respondent: Shri Gautam Singh Choudhary, JCIT-VH

Section 139Section 142(1)Section 147Section 148Section 234ASection 250Section 69

facts of the case in confirming the addition of Rs.4,50,000/- made by the ld. AO on account of alleged unexplained investment for purchase of shares u/s 69. The ld. AO and CIT (A) both have also erred in not considering the vital facts and material available on record ... details Form 16 etc. The AO considered the detailed submissions, but he did not find the explanation satisfactory and accordingly treating the amount as unexplained investment, made the addition under section 69 of the IT Act. Aggrieved by the order of the AO, the assessee preferred appeal before

Shri Ganesh Bhivraj Bhutada, Pune vs. ACIT, Central Circle1(1), Pune

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 1132/PUN/2024[2018-19]Status: DisposedITAT Pune06 Mar 2025AY 2018-19

Bench: Shri R. K. Panda & Shri Vinay Bhamore

For Appellant: Shri V Narendra Sharma, AdvocateFor Respondent: Shri Amol Khairnar, CIT-DR

Section 132Section 132(4)Section 133ASection 143(1)Section 143(2)Section 153C

hands of Shri Ganesh Bhutada as the amount of Rs.3 Cr. lent to Shri Ashok B Jain on 01/04/2016 treating as unexplained investment u/s 69 r.w.s. 115BBE of the Act. The Assessing Officer further noted that Shri Ganesh Bhutada has also earned interest of Rs.66,75,000/- on the amount ... corroborative evidences of the trail and fait-accompli of such transaction being not admitted by the appellant could not be treated as appellant's unexplained investment u/s. 69 of the Act as wrongly treated and added in the assessment order. The addition therefore so made by the Ld. Assessing Officer

Shri Ganesh Bhivraj Bhutada, Pune vs. ACIT, Central Circle1(1), Pune

In the result, both the appeals of the assessee are allowed for statistical purposes

ITA 1131/PUN/2024[2017-18]Status: DisposedITAT Pune06 Mar 2025AY 2017-18

Bench: Shri R. K. Panda & Shri Vinay Bhamore

For Appellant: Shri V Narendra Sharma, AdvocateFor Respondent: Shri Amol Khairnar, CIT-DR

Section 132Section 132(4)Section 133ASection 143(1)Section 143(2)Section 153C

Ravula Ravinder Reddy, Warangal vs. ITO., Ward-1, Warangal

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

ITA 171/HYD/2025[2017-2018]Status: DisposedITAT Hyderabad06 Mar 2025AY 2017-2018

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.171/Hyd/2025 (िनधा"रण वष"/Assessment Year: 2017-18) Shri Ravula Ravinder Reddy Vs. Income Tax Officer Warangal Ward – 1 Pan: Bclpr4397F Warangal (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Pradeep Raj Kuna, Ca राज" व "ारा/Revenue By:: Ms. Vishnu Priya, Dr सुनवाई की तारीख/Date Of Hearing: 03/03/2025 घोषणा की तारीख/Pronouncement: 06/03/2025 आदेश/Order

For Appellant: Shri Pradeep Raj Kuna, CAFor Respondent: : Ms. Vishnu Priya, DR

Section 139Section 142(1)Section 144

cash deposits in both the accounts put together is Rs.16,23,000/-, the ld CIT has wrongly added the entire cash deposits as unexplained investments without considering that there are cash withdrawals from the bank accounts. 3. The Assessing Officer erred in treating the c ash deposits and credits amounting

Aakriti Sarawgi, Giridih vs. ACIT Central Circle, Dhanbad

In the result, all the appeals filed by the assessee are allowed

ITA 83/RAN/2024[2021-22]Status: DisposedITAT Ranchi05 Mar 2025AY 2021-22

Bench: Shri George Mathan & Shri Ratnesh Nandan Sahayassessment Year: 2021-22

Section 115BSection 132Section 132(4)Section 139(1)Section 143(3)Section 68

income disclosed by the assessee as business income to such extent as related to the disclosure made u/s. 132(4) of the Act as unexplained investment, unexplained cash credits etc. u/s. 68 to 69D of the Act. Consequently, the Assessing Officer invoked the provisions of section 115BBE ... extent that it relates to the disclosure in 132(4) the same is liable to be treated as unexplained cash credits or unexplained investments as the case may be and the provisions of section 68 to 69D be applied. It was the submission that the provisions of section 115BBE