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“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

Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore vs. Mr. D K Shivakumar, Bangalore

In the result, we allow appeal filed by the assessee

ITA 46/BANG/2020[2008-09]Status: DisposedITAT Bangalore31 Jan 2025AY 2008-09

Bench: Shri Laxmi Prasad Sahu & Shri Soundarajan K

Section 153ASection 153C

case of ARPL on 03.12.2010, seized material marked as A/NSN/1 was found which reflected that there was unexplained investment of Rs. 9,90,145/- made by the assessee. On the basis of this evidence found in the course of search, the AO invoked the provisions of section 147 after duly

Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore vs. Mr. D K Shivakumar, Bangalore

ITA 45/BANG/2020[2007-08]Status: DisposedITAT Bangalore31 Jan 2025AY 2007-08

Bench: Shri Laxmi Prasad Sahu & Shri Soundarajan K

For Respondent: Shri. Chandrasekhar, AR
Section 153ASection 153C

u/s.132 of the Act in the case of ARPL on 03.12.2010, seized material marked as A/NSN/1 was found which reflected that there was unexplained investment of Rs.9,90,145/- made by the assessee. On the basis of this evidence found in the course of search, the AO invoked the provisions

Rajeshkumar Rameshchandra Shah, Mumbai vs. Deputy Commissioner of Income Tax, Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5573/MUM/2024[2018-19]Status: DisposedITAT Mumbai31 Jan 2025AY 2018-19

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Rajeshkumar Rameshchandra Shah, Mumbai vs. DCIT CC 4(1), Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5572/MUM/2024[2017-18]Status: DisposedITAT Mumbai31 Jan 2025AY 2017-18

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Rajeshkumar Rameshchandra Shah, Mumbai vs. Deputy Commissioner of Income Tax, Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5571/MUM/2024[2016-17]Status: DisposedITAT Mumbai31 Jan 2025AY 2016-17

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Rajeshkumar Rameshchandra Shah, Mumbai vs. Deputy Commissioner of Income Tax, Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5570/MUM/2024[2015-16]Status: DisposedITAT Mumbai31 Jan 2025AY 2015-16

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Rajeshkumar Rameshchandra Shah, Mumbai vs. Deputy Commissioner of Income Tax, Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5569/MUM/2024[2014-15]Status: DisposedITAT Mumbai31 Jan 2025AY 2014-15

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Rajeshkumar Rameshchandra Shah, Mumbai vs. DCIT, CC 4(1), Mumbai

In the result, all the appeals are allowed as indicated above

ITA 5568/MUM/2024[2013-14]Status: DisposedITAT Mumbai31 Jan 2025AY 2013-14

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am

For Appellant: Shri Vinod Kumar BindalFor Respondent: Smt. Sanyogita Nagpal
Section 132(4)Section 139(1)Section 153ASection 69

entries appearing in the seized material represent cash loan transactions of the assessee. Accordingly, he not only added back the alleged cash loan as unexplained investment u/s. 69 of the Act, but also computed notional interest thereon on estimate basis by applying the rate of interest of 1.50%. Accordingly ... merits of the additions made, at the outset. As discussed earlier, basically, the A.O. has made two additions. Firstly, addition on account of unexplained investment, being the alleged cash loan advanced by the assessee and, secondly, (A.Ys.2013-14 to 2018-19) Rajeshkumar Rameshchandra Shah vs. DCIT notional interest computed

Asia Investment Corporation (Mauritius) Limited, Mumbai vs. Deputy Commissioner of Income Tax (Int Taxation)1(1)(2), Mumbai

In the result the appeals filed by the assessee for both the years under consideration stands partly allowed

ITA 2766/MUM/2024[2017-18]Status: DisposedITAT Mumbai31 Jan 2025AY 2017-18

Bench: Smt. Beena Pillai () & Ms. Padmavathy S ()

Section 143(3)Section 147Section 148Section 148(1)(b)Section 69Section 74

thereby disallowed and why investments made in these securities amounting to Rs. 39,85,95,588 should not be added to your income as unexplained investment u/s 69C of the IT Act. It is also seen that you have shown carry forward of short-term capital losses amounting ... brought and sold. The assessee thus submitted that, the investments made in Virtual Global Education Ltd., and Stampeed Capital Ltd., cannot be treated as unexplained investments under section 69 of the Act. 2.7. The Ld.AO, however after considering the submissions of the assessee found the same to be not acceptable

Asia Investment Corporation (Mauritius ) Limited, Mumbai vs. Deputy Commissioner of Income Tax (Int Tax)-1(1)(2), Mumbai

In the result the appeals filed by the assessee for both the years under consideration stands partly allowed

ITA 2765/MUM/2024[2016-17]Status: DisposedITAT Mumbai31 Jan 2025AY 2016-17

Bench: Smt. Beena Pillai () & Ms. Padmavathy S ()

Section 143(3)Section 147Section 148Section 148(1)(b)Section 69Section 74

thereby disallowed and why investments made in these securities amounting to Rs. 39,85,95,588 should not be added to your income as unexplained investment u/s 69C of the IT Act. It is also seen that you have shown carry forward of short-term capital losses amounting ... brought and sold. The assessee thus submitted that, the investments made in Virtual Global Education Ltd., and Stampeed Capital Ltd., cannot be treated as unexplained investments under section 69 of the Act. 2.7. The Ld.AO, however after considering the submissions of the assessee found the same to be not acceptable

Shiv Nandan Prasad Suman, Madhubani vs. ITO, Ward - 6(1), Patna

The appeal of the assessee is allowed for statistical purposes

ITA 374/PAT/2024[2013-14]Status: DisposedITAT Patna30 Jan 2025AY 2013-14

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.374/Pat/2024 Assessment Year: 2013-14 Shiv Nandan Prasad Suman….....…..…………………....Appellant Laukaha, Madhubani, Bihar-847421. [Pan: Aitps3598Q] Vs. Ito, Ward-6(1), Patna…....….…….…............................…..…..... Respondent Appearances By: Shri Mayank Manvendra, Advocate Appeared On Behalf Of The Appellant. Shri Ashwani Kumar, Jcit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 28, 2025 Date Of Pronouncing The Order : January 30, 2025 आदेश / Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 23.02.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Is An Individual. The Assessment Order Was Framed In The Case Of The Assessee U/S 147 R.W.S 144B Of The Act As The Assessee Failed To File Return Of Income For Assessment Year 2013-14 Within The Prescribed Limit. The Assessing Officer Determined Total Income Of The Assessee At Rs.20,24,948/- By Making Certain Additions In Respect Of Unexplained Investment Of Rs.1445000/- U/S 69 Of The Act, Salary Income Of Rs.576492/- & Interest Income Of Rs.3456/-.

Section 147Section 249(4)Section 249(4)(b)Section 250Section 69

within the prescribed limit. The Assessing Officer determined total income of the assessee at Rs.20,24,948/- by making certain additions in respect of unexplained investment of Rs.1445000/- u/s 69 of the Act, salary income of Rs.576492/- and interest income of Rs.3456/-. I.T.A. No.374/Pat/2024 Assessment Year: 2013-14 Shiv Nandan

Jarnail Singh, Bilaspur vs. Principal Commissioner of Income Tax-1, Chandigarh

In the result, both the appeals of the assessee are disposed off in light of aforesaid directions

ITA 395/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh30 Jan 2025AY 2012-13

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR
Section 263

inference, however, the explanation of the assessee regarding penny stock was not accepted and an addition of Rs. 1,92,000/- on account of unexplained investment in penny stocks was made by the AO. 12. Subsequently, the assessment records were examined by the ld. PCIT, Shimla and a show cause

Jarnail Singh, Bilaspur vs. Principal Commissioner of Income Tax-1, Chandigarh

In the result, both the appeals of the assessee are disposed off in light of aforesaid directions

ITA 394/CHANDI/2023[2011-2012]Status: DisposedITAT Chandigarh30 Jan 2025AY 2011-2012

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR
Section 263

inference, however, the explanation of the assessee regarding penny stock was not accepted and an addition of Rs. 1,92,000/- on account of unexplained investment in penny stocks was made by the AO. 12. Subsequently, the assessment records were examined by the ld. PCIT, Shimla and a show cause

Smt. Liz Hemangbhai Bhatt, Ahmedabad vs. The Income Tax Officer, Ward-14(2), Ahmedabad

In the result, the appeal filed by the assessee is dismissed for non- prosecution

ITA 2426/AHD/2016[2008-0]Status: DisposedITAT Ahmedabad30 Jan 2025

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.2426/Ahd/2016 िनधा"रण वष" /Assessment Year : 2008-09 Smt.Liz Hemangbhai Bhatt The I.T.O. Ward 14 (2) बनाम/ 301, A Devprit Apartment Ahmedabad V/S. Nr.Bodakdev Cross Road Ahmedabad "थायी लेखा सं./Pan: Adtpb 9174 C (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee By : -None- Revenue By : Shri A.P. Singh, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 28/01/2025 घोषणा की तारीख /Date Of Pronouncement: 30/01/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: The Present Appeal Has Been Filed By The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals)-5, Ahmedabad [Hereinafter Referred To As “Cit(A)”] Dated 09.08.2016, For The Assessment Year 2008-09, Arising Out Of The Reassessment Order Passed By The Assessing Officer, Ward- 14(2), Ahmedabad (Hereinafter Referred To As “Ao”), Under Section 147 R.W.S. 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As “The Act”).

For Appellant: -None-For Respondent: Shri A.P. Singh, CIT-DR
Section 147Section 68Section 69

made additions under Sections 68 and 69, treating the cash deposits as unexplained cash credits and the cheque deposits as unexplained investment. 3. Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A), who granted partial relief by restricting the addition related to cheque ... follows: Smt. Liz Hemangbhai Bhatt vs. ITO Asst. Year : 2008-09 On Ground No. 3: Addition of Rs.1,17,14,443/- under Section 69 (Unexplained Investment) 9. The AO treated the entire cheque deposits of Rs.1,17,14,443/- as unexplained investment and added the full amount under Section

Asst. Commissioner of Income Tax- 14(1)(2), Mumbai, Aayakar Bhavan Mumbai vs. Foodlink Services India Pvt Ltd, Mumbai

In the result, the appeals of the Revenue for

ITA 4863/MUM/2024[2017-18]Status: DisposedITAT Mumbai30 Jan 2025AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Ravikant PathakFor Respondent: Mr. Raj Singh Meel, Sr. DR
Section 143(3)Section 154Section 68

carried out by the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No evidences have been brought on record

Asst. Commissioner of Income Tax- 14(1)(2), Mumbai, Aayakar Bhavan Mumbai vs. Foodlink Services India Pvt Ltd, Mumbai

In the result, the appeals of the Revenue for

ITA 4854/MUM/2024[2018-19]Status: DisposedITAT Mumbai30 Jan 2025AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Ravikant PathakFor Respondent: Mr. Raj Singh Meel, Sr. DR
Section 143(3)Section 154Section 68

carried out by the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No evidences have been brought on record

Asst. Commissioner of Income Tax- 14(1)(2), Mumbai, Aakar Bhavan vs. Foodlink Services India Pvt Ltd, Mumbai

In the result, the appeals of the Revenue for

ITA 4851/MUM/2024[2017-18]Status: DisposedITAT Mumbai30 Jan 2025AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Ravikant PathakFor Respondent: Mr. Raj Singh Meel, Sr. DR
Section 143(3)Section 154Section 68

carried out by the appellant. The AO has also not zeroed down on the specific modus operandi employed if any for carrying out the unexplained investment. The AO has not made any inquiries to establish that the investment was from a nonexistent entity. No evidences have been brought on record

DCIT, Central Circle-2, Faridabad vs. Peakwood Reality Pvt.Ltd., Gurgaon

ITA 89/DEL/2023[2012-13]Status: DisposedITAT Mumbai30 Jan 2025AY 2012-13

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2012-13 Dy. Cit Central Circle-Ii, M/S Peakwood Reality Pvt. Ltd., New Cgo Complex, Block- ‘B’, 3Rd Shop No. 6, 2Nd Floor, Jagdamba Vs. Floor, Nh-Iv, Faridabad, Palace, Near Gurgaon Dreamz Mall, Haryana-121001. Old Railway Road, Gurgaon-122001. Pan No. Aacce 1245 J Appellant Respondent

For Appellant: Mr. Gautam Jain (Virtually Present)For Respondent: Mr. R.A. Dhyani, CIT-DR

erred in deleting the addition of Rs. addition of Rs. 62,89,71,086/ 62,89,71,086/- made on account of unexplained investment by made on account of unexplained investment by holding that quantum addition on this issue has already been holding that quantum addition on this issue ... 153C of the Act on 29.12.2017 added the completed u/s 153C of the Act on 29.12.2017 added the Rs.62,89,71,086/- as unexplained investment. On further appeal, as unexplained investment. On further appeal, as unexplained investment. On further appeal, M/s Peakwood Reality Pvt. Ltd. M/s Peakwood Reality

ACIT, New Delhi vs. M/S. Mahamaya Exports Pvt. Ltd., New Delhi

Appeal is dismissed

ITA 6341/DEL/2016[2011-12]Status: DisposedITAT Delhi30 Jan 2025AY 2011-12

Bench: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman

For Appellant: NoneFor Respondent: Ms. Baljeet Kaur, CIT-DR
Section 153ASection 153C

erred on facts and in law in deleting the addition of Rs. 38,28,225/-made by AO on account of unexplained investment in property of the assessee. 3 Mahamaya Exports Pvt. Ltd. 8. That The Ld. CIT(A) has erred on facts and in law in deleting the addition ... made by AO on account of unexplained investment in property of the assessee. 9. That The Ld. CIT(A) has erred on facts and in law in deleting the addition of Rs. 16,59,53,125/- made by AO on account of Unexplained investment in property by the assessee

Prem Singh Saluja, Raipur vs. Income Tax Officer Ward-2, Raigarh

ITA 428/RPR/2024[2011-12]Status: DisposedITAT Raipur29 Jan 2025AY 2011-12

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 428/Rpr/2024 (िनधा"रण वष" Assessment Year: 2011-12)

For Appellant: Shri Sunil Kumar Agrawal & Vimal KumarFor Respondent: Smt. Anubhaa Tah Goel, Sr. DR
Section 143(3)Section 147Section 148Section 151(1)Section 250Section 69

facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.51,53,100 made u/s 69 on unexplained investment made by assessee on alleged purchase of land in the name of Bhanu Pratap Singh; in absence of any evidence/ material brought on record ... facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.51,53,100 made u/s69 on unexplained investment; only on the basis of third party statement recorded on 20-2-18 & 26-2-18 in a separate 3 Prem Singh Saluja, Raipur