“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

Assistant Commissioner of Income Tax, Central Circle-2, Trichy vs. Jayaraman Muthureddiar, Trichy

In the result, both the appeals stand dismissed

ITA 2640/CHNY/2024[2016-17]Status: DisposedITAT Chennai22 Jan 2025AY 2016-17

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm 1. आयकरअपील सं./ Ita No.2641/Chny/2024 (िनधा9रणवष9 / Assessment Year: 2015-16) Acit Shri Ramasamy Natarajan बनाम Central Circle-2 # 255, Ganapathy Nagar South, / Vs. Trichy. T.V. Kovil Trichy-620005. "थायीलेखासं./ जीआइआरसं./Pan/Gir No. Aabpn-8486-E (अपीलाथ"/Appellant) : (" थ" / Respondent) & 2. आयकरअपील सं./ Ita No.2640/Chny/2024 (िनधा9रणवष9 / Assessment Year: 2016-17) Acit Shri Jayaraman Muthureddiar बनाम #14, Akila Gardens, 1St Street, Central Circle-2 Trichy. Ganapathy Nagar, T.V.Kovil / Vs. Trichy-620005. "थायीलेखासं./ जीआइआरसं./Pan/Gir No. Aadhj-0819-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओर से/ Revenue By : Shri R. Clement Ramesh Kumar (Cit)-Ld. Dr " थ" की ओर से/ Assessee By : Shri Y. Sridhar (Fca) & Ms. Varshha Sridhar (Ca)-Ld. Ars सुनवाई की तारीख/Date Of Hearing : 02-01-2025 घोषणा की तारीख /Date Of Pronouncement : 22-01-2025 आदेश / O R D E R

For Appellant: Shri Y. Sridhar (FCA) & Ms. VarshhaFor Respondent: Shri R. Clement Ramesh Kumar (CIT)-Ld. DR

Section 131Section 132Section 143(3)Section 153CSection 69

carry cash being interest on loan to the assessee. On the basis of aforesaid facts, Ld. AO proceeded to make impugned addition of unexplained investment in the hands of the assessee. 3.4 During assessment proceedings, the assessee refuted the allegation of Ld. AO and stated that the proposed addition ... months from the date of search which was unacceptable. Finally, the loan amount of Rs.517.84 Lacs pertaining to this year was added as unexplained investment u/s 69 whereas interest amount of Rs.108 Lacs as allegedly received by the assessee was added as ‘Income from other sources’. Similar assessment was framed

Assistant Commissioner of Income Tax, Central Circle-2, Madurai vs. Colombo Stores, Karaikudi

The appeal stands dismissed

ITA 1413/CHNY/2023[2019-2020]Status: DisposedITAT Chennai22 Jan 2025AY 2019-2020

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.1413/Chny/2023 (िनधा*रण वष* / Assessment Year: 2019-20) Acit M/S Colombo Stores बनाम/ Central Circle-2, 79/1, Kallukatti East, Vs. Madurai. Karaikudi, Sivagangai-630 001. "थायीलेखासं./जीआइआरसं./Pan/Tan No. Aaffc-8405-L (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Revenue By : Shri Nilay Baran Som (Cit) - Ld. Dr ""थ"कीओरसे/ Assessee By : Shri R. Meenakshi Sundaram (Advocate) – Ld.Ar सुनवाईकीतारीख/Date Of Hearing : 02-01-2025 घोषणाकीतारीख /Date Of Pronouncement : 22-01-2025 आदेश / O R D E R

For Appellant: Shri R. Meenakshi SundaramFor Respondent: Shri Nilay Baran Som (CIT) - Ld. DR

Section 133ASection 144

course of survey. No attempt was made to verify the ownership details of the land & building of the assessee-firm before making addition of unexplained investment in the hands of the firm. This addition could have been made only in the hands of the partners but not in the hands ... firm. Therefore, the addition of unexplained investment of Rs.325 Lacs was deleted. 3.3 On the issue of stock, it was observed that value of physical stock was Rs.690.82 Lacs as against book stock of Rs.598.76 Lacs. Thus, there was difference if Rs.92.05 Lacs only. As against this, the assessee already

M/S. Talbros Engineering Limited, New Delhi vs. Addl.CIT, Faridabad

In the result, both these appeals are allowed for statistical

ITA 4536/DEL/2014[2009-10]Status: DisposedITAT Delhi22 Jan 2025AY 2009-10

Bench: Shrimahavir Singh, Hon’Ble & Shrisanjay Awasthiआ.अ.सं/.I.T.A Nos.4535 & 4536/Del/2025 िनधा"रणवष"/Assessment Year:2012-13 & 2017-18 बनाम Pawan Kumar Sharma, Assistant Commissioner Of C-9/62, Yamuna Vihar, New Delhi. Vs. Income Tax, Pan No.Alwps4681A Circle 60(1), Delhi. अपीलाथ" Appellant ""यथ"/Respondent

Section 144Section 250

both these cases additions have been made u/s 69A of the Act on account of alleged unexplained cash deposits and alleged unexplained investments. In ITA 4536 there is an additional addition of Rs.1.64 lakhs u/s 40(a)(ia) of the Act. Both these appeals pertained to ex parte orders

Nikunjkumar Ghanshyambhai Desai, Desai Street vs. Income Tax Officer, Second Floor

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

ITA 176/SRT/2024[2011-2012]Status: DisposedITAT Surat21 Jan 2025AY 2011-2012

Bench: Shri Pawan Singh & Shri Bijayananda Prusethआयकर अपील सं./Ita No.176/Srt/2024 Assessment Year: (2011-12) (Hybrid Hearing) Nikunjkumar Ghanshyambhai Desai, Vs. The Ito, Panetha Desai Street Paneth, Zaghadia, Ward – 1(4), Bharuch – 393120, Gujarat Bharuch "थायीलेखासं./जीआइआरसं./Pan/Gir No: Amgpd2814B (Appellant) (Respondent) Appellant By Shri Piyush Panchal, Ca Respondent By Shri Mukesh Jain, Sr. Dr Date Of Hearing 16/01/2025 Date Of Pronouncement 21/01/2025

Section 148Section 250Section 271(1)(c)Section 69Section 69A

r.w.s. 147 of the Act, the AO has added (i) unexplained money u/s 69A of the Act of Rs.12,23,000/- (ii) unexplained investment u/s 69 of the Act of Rs.4,94,586/- and (iii) unexplained interest income of Rs.1,365/-. The total addition of Rs.17,18,950/- was confirmed

Assistant Comissioner Central Circle 1(3), Nagpur vs. M/S Shrigopal Rameshkumar Sales Pvt. Ltd, Nagpur

In the result, appeal filed by the Revenue is dismissed

ITA 135/NAG/2018[2015-2016]Status: DisposedITAT Nagpur21 Jan 2025AY 2015-2016

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Kapil HiraniFor Respondent: Shri Sandipkumar Salunke

Section 132Section 132(1)Section 139Section 69C

compared to the stock as per books of accounts. Therefore, the Assessing Officer added the amount of ` 5,13,63,972, as unexplained investment in stock as the assessee could not reconcile the same. The learned CIT(A) has accepted the reconciliation submitted by the assessee and restricted the addition

Kanthety Naga Rama Lakshmi Vara Prasad, Machilipatnam vs. Income Tax Officer, Ward-1, Machilipatnam

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

ITA 416/VIZ/2024[2016-17]Status: DisposedITAT Visakhapatnam21 Jan 2025AY 2016-17

Bench: Shri Laliet Kumar, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपीलसं./I.T.A.No.415 & 416/Viz/2024 (निर्धारण वर्ा/ Assessment Years: 2015-16 & 2016-17) Kanthety Naga Rama Lakshmi Vara Prasad V. Ito – Ward – 1 D.No. 25/524-A/5, Ramamani General Merchants Income Tax Office Jagannadhapuram, Parsapet, Machilipatnam – 521001 Machilipatnam – 521001, Andhra Pradesh Andhra Pradesh [Pan: Aldpk2888A] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 144

assessment by determining the income of the assessee at Rs. 7,31,25,576/- by making addition of Rs. 6,97,16,283 as unexplained investment and Rs.28,74,095/- towards estimated profit @5% of the value imported pulses and grains. 7. On being aggrieved, assessee preferred an appeal before ... have held that the Assessing officer is not justified in making addition of Rs.6,97,16,283 u/s 69 of the Act towards unexplained investment in purchase value of pulses and grains imported and the incidental expenses. 4. The learned Commissioner Income Tax (Appeals) ought to have held that

Kanthety Naga Rama Lakshmi Vara Prasad, Machilipatnam vs. Income Tax Officer, Ward-1, Machilipatnam

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

ITA 415/VIZ/2024[2015-16]Status: DisposedITAT Visakhapatnam21 Jan 2025AY 2015-16

Section 144

Ranjit Thakur, Jaipur vs. Income Tax Officer, Jaipur

ITA 1121/JPR/2024[2011-12]Status: DisposedITAT Jaipur21 Jan 2025AY 2011-12

Bench: SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Sh. S. L Poddar, AdvFor Respondent: Sh. Gautam Singh Choudhary, JCIT-Sr. DR

Section 142(1)Section 144Section 147Section 148

case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 5,87,200/- on account of alleged unexplained investment for purchase of shares. 4 Under the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming ... addition of Rs. 5,00,000/- on account of alleged unexplained investment for purchase of bonds. 5 The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing.” 3. Succinctly, the facts as culled out from the record

Dy.Commissioner of Income Tax, Central Circle-1, Aurangabad vs. Shri. Balaji Ramchandra Ande, Latur

In the result, appeal of the Revenue dismissed

ITA 625/PUN/2024[2018-19]Status: DisposedITAT Pune21 Jan 2025AY 2018-19

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: Shri Sharad A Shah And Shri Rohit S TapadiyaFor Respondent: Shri Ramnath P Murkunde

Section 115BSection 131Section 133ASection 143(2)Section 68Section 69ASection 69BSection 69C

capital gains, nor 8 ITA.No.625/PUN./2024 is it income from other sources' because the provisions of sections 69, 69A, 698, and 69C treat unexplained investments, unexplained money, bullion, etc., and unexplained expenditure as deemed income where the nature and source of investment, acquisition or expenditure, as the case

Balaji Gramin Sahkari Pat Sanstha Maryadit, Maharashtra vs. Income Tax Officer, Ward 1(5), Kolhapur

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

ITA 2141/PUN/2024[2015-16]Status: DisposedITAT Pune21 Jan 2025AY 2015-16

Bench: Dr. Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.2141/Pun/2024 धििाारण वषा / Assessment Year: 2015-2016 Balaji Gramin Sahkari Pat Vs Ito, Ward Sanstha Maryadit, 1 Kodoli 1(5), Kolhapur Shivaji Chouk Panhala, Kolhapur-416201 Maharashtra Pan-Aabab9500E Appellant Respondent

For Appellant: NoneFor Respondent: M/s. Shilpa N.C

Section 144Section 147Section 148Section 151ASection 250Section 250(6)Section 69

source can be explained. 5. Whether AO is correct in treating the cash deposit/ time deposit of Rs 44,00,000 as unexplained investment u/s 69 r.w.s 115BBE when the source can be explained. 6. Whether AO is correct in passing order merely on the availability of information with department

Mili Sameer Joshi, Santacruz East vs. Income Tax Officer, Piramal Chamber Lalbaug

In the result, the Assessee’s appeal is allowed on merits

ITA 4520/MUM/2024[2016 2017]Status: DisposedITAT Mumbai21 Jan 2025

Bench: Shri Narender Kumar Choudhryassessment Year: 2016-17

For Appellant: Shri Prateek Jain, CAFor Respondent: Shri V.K. Chaturvedi, Sr. D.R

Section 147Section 148Section 250Section 44A

which has escaped assessment for the A.Y. 2016-17 and therefore the same is added to the total income of the Assessee as unexplained investment u/s 69A of the Act. 6. The Assessee, being aggrieved, before the Ld. Commissioner raised various grounds challenging the reopening of the proceedings and issuing

Dy. Commissioner of Income Tax Circle - 7(1)(1), Mumbai, Income Tax vs. Modern India Limited, Mumbai

In the result, appeals and cross objections are dismissed

ITA 4132/MUM/2024[2014]Status: DisposedITAT Mumbai21 Jan 2025

Bench: Shri Saktijit Dey, V.P. & Shri Girish Agrawal, A.M.

Section 143(3)Section 147Section 148ASection 68Section 69

bogus commodity trading activity through Client code modification and added back the amounts of Rs.5,85,94,662/- and Rs.30,97,261/- respectively as unexplained investment u/s. 69 of the Act in A.Y 2012-13 and unexplained cash credit u/s. 68 of the Act in AY 2014-15. Contesting

Dy. Commissioner of Income Tax Circle - 7(1)(1), Mumbai, Income Tax Department vs. Modern India Limited, Mumbai

In the result, appeals and cross objections are dismissed

ITA 4131/MUM/2024[2012]Status: DisposedITAT Mumbai21 Jan 2025

Bench: Shri Saktijit Dey, V.P. & Shri Girish Agrawal, A.M.

Section 143(3)Section 147Section 148ASection 68Section 69

Growmore Research and Assets Management, Mumbai vs. DCIT, CC-4(1) (Erstwhile DCIT-31, Mumbai

In the result, both the appeals are treated as partly allowed

ITA 453/MUM/2023[1992-93]Status: DisposedITAT Mumbai21 Jan 2025AY 1992-93

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Vijay Mehta and ShriDharmeshFor Respondent: Dr.P. Daniel – Spl. Counsel

Section 144

adjudicated together. 8. The Ground No.1 urged by the revenue is related to the relief granted by the Ld.CIT(A) in respect of unexplained investment made in purchase of shares of Reliance Industries Ltd (RIL). 8.1. The facts relating thereto are discussed in brief. The AO noticed that the assessee ... assessee has purchased 69,450 shares in the month of April, 1991. quantity of 80,550 shares. Accordingly, the AO treated it as unexplained investment and assessed a sum of Rs.1,23,13,150/-. Similarly, the AO had initially held that sources of 90,000 shares of M/s Grasim Industries

Dy. Commissioner of Income Tax, CC-4(3) Central Range-4, Mumbai vs. M/S Growmore Research and Assets Management Limited, Mumbai

ITA 1125/MUM/2023[1992-93]Status: DisposedITAT Mumbai21 Jan 2025AY 1992-93

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Vijay Mehta and ShriDharmesh ShahFor Respondent: Dr.P. Daniel – Spl. Counsel

Section 144

adjudicated together. 8. The Ground No.1 urged by the revenue is related to the relief granted by the Ld.CIT(A) in respect of unexplained investment made in purchase of shares of Reliance Industries Ltd (RIL). 8. 1. The facts relating thereto are discussed in brief. The AO noticed that ... According to the AO, the assessee did not prove the purchase of balance quantity of 80,550 shares. Accordingly, the AO treated it as unexplained investment and assessed a sum of Rs.1,23,13,150/-. Similarly, the AO had initially held that sources of 90,000 shares of M/s Grasim

Nishant Jain, Bilaspur vs. ACIT Central Circle, Bilaspur

In the result, appeal filed by the assessee in ITA No

ITA 512/RPR/2024[2018-19]Status: DisposedITAT Raipur20 Jan 2025AY 2018-19

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita Nos. 510, 511 & 512/Rpr/2024 "नधा"रण वष" / Assessment Years : 2014-15, 2017-18 & 2018-19 Nishant Jain Ring Road No.2, Shanti Nagar, Near Sidhasikhar Vistar, Bilaspur (C.G.)-495 001 Pan: Agepj9793M .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax, Circle-1(1), Bilaspur (C.G.) ……""यथ" / Respondent

For Appellant: S/shri Sunil Kumar Agrawal &For Respondent: Smt. Anubhaa Tah Goel, Sr. DR

Section 143(3)Section 263

Nishant Jain Vs. ACIT, Circle-1(1), Bilaspur ITA Nos. 510 to 512/RPR/2024 Total surrender 2,26,22,775/- B. Disclosure of unexplained investment in immovable property (building at Street No.13, Block No.19, Plot No.2/81, P.H. No.26, Ward No.03, Near Siddh Shikar Vistar, Shanti Nagar, Bilaspur): FY Investment value Value ... above by me. However, I do not dispute the valuation given by the approved valuer and accept the difference of Rs.56,45,491/- as unexplained investment in the building for the AY 2017-18 respectively as detailed in the above chart. On the basis of statement given by me above

Nishant Jain, Bilaspur vs. ACIT Circle 1(1), Bilaspur

In the result, appeal filed by the assessee in ITA No

ITA 511/RPR/2024[2017-18]Status: DisposedITAT Raipur20 Jan 2025AY 2017-18

For Appellant: S/shri Sunil Kumar Agrawal &For Respondent: Smt. Anubhaa Tah Goel, Sr. DR

Section 143(3)Section 263

Nishant Jain, Bilaspur vs. ACIT Circle 1(1), Bilaspur

In the result, appeal filed by the assessee in ITA No

ITA 510/RPR/2024[2014-15]Status: DisposedITAT Raipur20 Jan 2025AY 2014-15

For Appellant: S/shri Sunil Kumar Agrawal &For Respondent: Smt. Anubhaa Tah Goel, Sr. DR

Section 143(3)Section 263

Panchsheel Solvent Pvt. Ltd., Rajanandgaon vs. Assistant Commissioner of Income Tax, Central Circle-2, Raipur

Appeal is allowed, partly for statistical purposes

ITA 110/RPR/2024[2016-17]Status: DisposedITAT Raipur20 Jan 2025AY 2016-17

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 110/Rpr/2024 (िनधा"रण वष" Assessment Year: 2016-17)

For Appellant: Shri Sunil Kumar Agrawal & Vimal KumarFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 142(1)Section 143(2)Section 143(3)Section 144Section 250

reason that the lumpsum adhock addition of Rs.1,45,473/-on account of clerical error made by assessee and treating the same as unexplained investment by the Hon Assessing officer is bad in law and justified the order of Id AO by learned commissioner without application of mind ... absence of bills and vouchers not furnished during the assessment proceeding, an amount of Rs.96,99,743/- should not be disallowed on account of unexplained investment u/s 69 and added back to the total income. During the course of assessment proceedings, the assessee has furnished his reply through email

Avinash Dadhich, Pal Road vs. ACIT, Circle(Intl. Tax), Jaipur

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

ITA 824/JPR/2024[2018-19]Status: DisposedITAT Jaipur20 Jan 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM आयकर अपील सं./ITA No.824/JPR/2024 निर्धारण वर्ष / Assessment Year: 2018-19 Avinash Dadhich A-191 Mansarovar Scheme Pal Road, Jodhpur. बनाम The ACIT, Circle, International Taxation, Jaipur. अपीलार्थी / Appellant प्रत्यर्थी / Respondent स्थायीलेखा सं. / जीआईआर सं./PAN/GIR No.:BIFPD2373H निर्धारिती की ओरसे / Assesseeby : Shri Amit Kothari (C.A.) (Th. V.C.) राजस्व की ओरसे / Revenue by: Shri Anup Singh(Addl.CIT) सुनवाई की

For Appellant: Shri Amit Kothari (C.A.) (Th. V.C.)For Respondent: Shri Anup Singh(Addl.CIT)

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

light of that observation ld. AO noted that the transactions of Rs. 52,38,814/- remain unexplained and falls under the purview of unexplained investment u/s 69 of the Income Tax Act, 1961. Since the assessee failed to explain the source of investment even after providing sufficient time, therefore ... source of investment of Rs. 52.38,814/- remained unexplained and thus added to the total income of the assessee on account of unexplained investment under section 69 of the Act. The draft order was served upon the assessee and since the assessee did not raise any objection before