“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-16(2)(1), Mumbai vs. Bhavini Kartik Mehta, Mumbai

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

ITA 5266/MUM/2025[2017-18]Status: DisposedITAT Mumbai09 Feb 2026AY 2017-18

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2017-18

For Appellant: Mr. Vipul ShahFor Respondent: 16/12/2025

Section 56(2)(vii)Section 69

deleting the addition of learned CIT(A) was right in deleting the addition of learned CIT(A) was right in deleting the addition of unexplained investment of Rs.88,20,000/ unexplained investment of Rs.88,20,000/- u/s.69 of the I.T. u/s.69 of the I.T. Act without appreciating the fact that ... differential stamp duty value; and 56(2)(vii)(b) of the Act, being the differential stamp duty value; and (b) ₹88,20,000/- as unexplained investment under section 69 of the as unexplained investment under section 69 of the as unexplained investment under section 69 of the Act, being

Abdurrehman Shamsulhaq Bapu, Mumbai vs. ITO Ward 1(2)(1), Mumbai

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

ITA 4479/MUM/2025[2016-17]Status: DisposedITAT Mumbai09 Feb 2026AY 2016-17

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2016-17

For Appellant: Shri Vimal Punmiya, CAFor Respondent: Shri Satya Pal Kumar, CIT DR

Section 144C(2)Section 144C(3)Section 147Section 148Section 250Section 56(2)(vii)Section 69

Total Rs.3,00,00,000/- as per the two registered agreements minus Rs.2,14,16,250/-), the said amount was added as unexplained investment u/s.69 of the Act. Against these additions, assessee filed appeal before the ld. CIT(A). 4. In the first appeal, addition made of Rs.2 ... that this balance amount of the purchase consideration for Units 603 and 703 was not satisfactorily explained and therefore liable to be treated as unexplained investment under section 69. ii. Finding of ld. CIT(A) is incorrect because the entire evidentiary record demonstrates that assessee has fully established the identity

Municipal Council Dongargarh, Rajnandgaon vs. ITO, Ward-1/Rajnandgaon, Rajnandgaon

In the result, the appeal of the assessee is allowed as above

ITA 625/RPR/2025[2018-19]Status: DisposedITAT Raipur06 Feb 2026AY 2018-19

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Avdhesh Kumar Mishra, Am आयकर अपील सं. / Ita No: 625/Rpr/2025 (िनधा"रण वष" Assessment Year: 2018-19) Municipal Council Dongargarh, Vs Ito, Ward-1/Rajnandgaon, Income C/O Chief Municipal Officer, Tax Office, Raipur Naka, Municipal Council, Dongargarh, Rajnandgaon, Chhattisgarh, 491441 Rajnandgaon, Chhattisgarh, 491445 Pan: Aamfm7895D (अपीलाथ"/Appellant) : (""थ" / Respondent) िनधा"रती की ओर से / Assessee By : Shri Nitesh Khandelwal, Ca & Ms. Swati Khandelwal, Ca राज" की ओर से / Revenue By : Shri Yogesh Kumar Sharma, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 04/02/2026 घोषणा की तारीख / Date Of : 06/02/2026 Pronouncement आदेश / O R D E R Per Avdhesh Kumar Mishra, Am: This Appeal For Assessment Year (‘Ay’) 2018-19 Filed By The Assessee Is Directed Against The Order Dated 26.08.2025 Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [‘Cit(A)’] Passed Under Section 250 Of The Income Tax Act, 1961 (‘Act’).

For Appellant: Shri Nitesh Khandelwal, CA and Ms. Swati Khandelwal, CAFor Respondent: Shri Yogesh Kumar Sharma, CIT-DR

Section 10Section 115BSection 139(1)Section 148Section 148ASection 250Section 69

erred in confirming addition of a sum of Rs.3,57,12,724/- for the money deposited in bank holding the same to be unexplained investment in terms of section 69 read with 1 Municipal Council Dongargarh vs. ITI, Ward-1/Rajnandgaon section 115BBE of the Income

Ashok Kumar Moonat, Ratlam vs. Asstt. Commissioner of Income Tax (Central-3), Indore

ITA 715/IND/2025[2018-19]Status: DisposedITAT Indore06 Feb 2026AY 2018-19

Section 115BSection 133ASection 143(2)Section 28Section 68Section 69BSection 80C

same are mixed in the stock hence excess stock found cannot be considered as un-identified so as to treat the same as unexplained investment u/s 69B of the Act. 2. That the Ld. CIT(A) further erred in not following various judgments of Income tax Appellate Tribunals including that ... avoid litigation and to buy peace of mind but bonafide and true explanation given regarding excess stock should have been considered legitimate instead of unexplained investment u/s 69B of the Act. Levy of tax at higher rate u/s 115BBE of the Act is wholly unjustified, improper

M/S Singla Builders and Promoters Limited, Rupnagar, Punjab vs. DCIT/ACIT(Cen)-1 Chd, Chandigarh

The appeals stand partly allowed

ITA 487/CHANDI/2025[2013-14]Status: DisposedITAT Chandigarh06 Feb 2026AY 2013-14

Bench: Hon’Ble Shri Rajpal Yadav & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकर अपील सं./ Ita No.487/Chandi/2025 (िनधा"रण वष" / Assessment Year: 2013-14) M/S Singla Builders & Promoters Ltd. Dcit / Acit Central-1 बनाम/ Plot No 1265, Sector 82, Industrial Area C.R. Building, Sector 17 Vs. Rupnagar (Punjab) 140308 Chandigarh-160017 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaocs-6503-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & 2. आयकर अपील सं. / Ita No.482/Chandi/2025 (िनधा"रण वष" / Assessment Year: 2017-18) & 3. आयकर अपील सं. / Ita No.484/Chandi/2025 (िनधा"रण वष" / Assessment Year: 2018-19) M/S Credo Assets Private Ltd. Dcit / Acit Central-1 बनाम/ Plot No 1265-C, Sector 82, Industrial Area C.R. Building, Sector 17 Vs. Rupnagar (Punjab) 140308 Chandigarh-160017 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aafcc-6400-L (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Parikshit Aggarwal (Ca) & Smt. Shruti Khandelwal (Ca) – Ld. Ars ""थ"कीओरसे/Respondent By : Smt. Kusum Bansal (Cit) & Shri Rajat Kumar Kureel (Cit) – Ld. Drs (Virtual) Date Of Final Hearing : 27-01-2026 Date Of Pronouncement : 03-02-2026

For Appellant: Sh. Parikshit Aggarwal (CA) & Smt. ShrutiFor Respondent: Smt. Kusum Bansal (CIT) & Shri Rajat Kumar

Section 127Section 132Section 142ASection 143(3)Section 153ASection 153BSection 69ASection 69B

assets as mentioned in Explanation-2. Finally, the assessee’s legal objection was rejected. 3.4 The Ld. AO proceed to make addition of unexplained investment u/s 69B on the basis of DVO valuation. It was alleged that the assessee, in the course of developing its real estate projects, was making ... hold that the case of an assessee falls under Sec.69, as the case may be, that he can, to estimate the value of such unexplained investment or expenditure in bullion, jewellery etc. can call for the report of the valuer. The initial starting point for referring valuation

M/S Credo Assets Pvt. Ltd., Rupnagar Punjab vs. DCIT/ACIT(Cen)-1 Chd, Chandigarh

The appeals stand partly allowed

ITA 482/CHANDI/2025[2017-18]Status: DisposedITAT Chandigarh06 Feb 2026AY 2017-18

For Appellant: Sh. Parikshit Aggarwal (CA) & Smt. ShrutiFor Respondent: Smt. Kusum Bansal (CIT) & Shri Rajat Kumar

Section 127Section 132Section 142ASection 143(3)Section 153ASection 153BSection 69ASection 69B

Meghna Banga, Delhi vs. DCIT Central Circle-7, Delhi

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

ITA 3936/DEL/2025[2017-2018]Status: DisposedITAT Delhi06 Feb 2026AY 2017-2018

Bench: Shri Mahavir Singh & Shri Krinwant Sahay[Assessment Year: 2017-18]

Section 132Section 142Section 153Section 153CSection 153DSection 250Section 292CSection 65Section 69A

also not the case that Sh. Sumeet Banga has earned any unaccounted income or made any unexplained investment during the relevant period. So, it is an established Page 4 of 7 fact that apart of this unexplained cash of Rs.19,94,500/-, there does not exist any adverse information against

Shuchi Agarwal, C/O Bk Kapur and Company vs. ACIT, Ghaziabad

In the result, the appeal of the assessee is dismissed

ITA 3922/DEL/2025[2022-23]Status: DisposedITAT Delhi06 Feb 2026AY 2022-23

Bench: Shri Mahavir Singh & Shri Krinwant Sahay[Assessment Year: 2022-23]

Section 143(3)Section 69A

circumstance of the case, the Ld. CIT(A) erred in law in sustaining the addition made by the Ld. AO on account of alleged unexplained investment u/s 69A (jewellery found during search) for Rs.9,10,926/- which are ipso facto based on mere surmises, conjectures and presumptions and deserves

Kavita Gupta, East Delhi vs. Deputy Commissioner of Income Tax, Circle-31, Jhandewalan Extension

In the result, the appeal of the assessee is allowed

ITA 1643/DEL/2025[2020-2021]Status: DisposedITAT Delhi06 Feb 2026AY 2020-2021

Bench: Shri Mahavir Singh & Shri Krinwant Sahay[Assessment Year: 2020-21]

Section 115BSection 153CSection 69

made by Assessing Officer on account of investment made in cash for booking of Flat No.1501, in BURJ PROJECT, Nodia, holding it to be unexplained investment, invoking Sector-69. The Appellant prays that the addition of Rs.50/- Lac made U/s.69 of the Act be deleted. 08. Without prejudice to ground

DCIT, Central Circle-6, Third Floor vs. Rama Shankar Khemka, Ganesh Bazar

In the result, the appeal filed by the revenue and CO filed by the assessee are dismissed

ITA 1005/DEL/2024[2020-21]Status: DisposedITAT Delhi06 Feb 2026AY 2020-21

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmandcit Vs. Payal Khemka Central Circle- 6 67/85-2 Jhun Bhawan, Natimalivaranashi Delhi Uttar Pradesh 221001 (Pan: Adtpj2728A) Dcit Vs. Pmk Impex Pvt. Ltd. Central Circle- 6 1 Tolstoy Marg, Connaught Place, Delhi New Delhi, Delhi 110001

For Appellant: Sh. Gautam Jain AdvFor Respondent: Sh. Jitender Singh, CIT DR

Section 132Section 132(4)

above discussion, Rs. 17,25,00,000/- (being 75% share of the assessee in payment of Rs. 23 crores) is treated as unexplained investment of the assessee u/s 69 r.w.s. 115BBE of the Act for A.Υ. 2020-21 relevant to the F.Y. 2019-20." 10. Aggrieved by the order ... purchase of the said property. Accordingly, the additions made by the Assessing Officer w/s 69 r.w.s 115 BBE of Income Tax Act as unexplained investment is not sustainable. Therefore, the addition of Rs. 17,25,00,000/- made by the Assessing Officer as unexplained investment of the assessee

DCIT, Central Circle-6, Third Floor vs. Rajesh Rani Khemka, Ganesh Bazar

In the result, the appeal filed by the revenue and CO filed by the assessee are dismissed

ITA 1004/DEL/2024[2020-21]Status: DisposedITAT Delhi06 Feb 2026AY 2020-21

For Appellant: Sh. Gautam Jain AdvFor Respondent: Sh. Jitender Singh, CIT DR

Section 132Section 132(4)

DCIT, Central Circle-6, Income Tax Department vs. Pmk Impex Private Limited, Atma Ram House

ITA 1002/DEL/2024[2020-21]Status: DisposedITAT Delhi06 Feb 2026AY 2020-21

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

For Appellant: Sh. Gautam Jain AdvFor Respondent: Sh. Jitender Singh, CIT DR

Section 132Section 132(4)

DCIT, Central Circle-6, Income Tax Department vs. Payal Khemka, K

In the result, the appeal filed by the revenue and CO filed by the assessee are dismissed

ITA 1000/DEL/2024[2020-21]Status: DisposedITAT Delhi06 Feb 2026AY 2020-21

For Appellant: Sh. Gautam Jain AdvFor Respondent: Sh. Jitender Singh, CIT DR

Section 132Section 132(4)

Zafar Iqbal, Siliguri vs. DCIT, Circle - 1, Siliguri

ITA 1170/KOL/2024[2016-2017]Status: DisposedITAT Kolkata05 Feb 2026AY 2016-2017

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 139(1)Section 143(2)Section 250Section 54F

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT

Incometax Officer, Chennai vs. Chinnan Vaithyalingam, Chennai

In the result, the appeal of the Revenue and stay application of the

ITA 2348/CHNY/2025[2011]Status: DisposedITAT Chennai05 Feb 2026

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

For Appellant: Shri. T. Vasudevan, AdvocateFor Respondent: Shri. C. Sivakumar, Addl. C.-T

Section 144Section 148

point of time can be brought to tax, and not the cumulative deposits made / reflected in the bank statements. What is relevant is the unexplained investment or application of funds at its highest point, and not the repetitive circulation thereof, which tantamount to income. 15. On perusal of the peak

Arvind Kumar Mishra, Jamshedpur vs. ITO 1(1), Jamshedpur

In the result, the appeal of the assessee is allowed

ITA 229/RAN/2025[2017-18]Status: DisposedITAT Ranchi04 Feb 2026AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.229/Ran/2024 Assessment Year: 2017-18 Arvind Kumar Mishra… ….…………….……...................……….……Appellant 22/20, Mishra Niwas, Kharangajhar, Near Hanumanmandir Road Telco, Jamshedpur, Jharkhand – 831004. [Pan: Agdpm2983R] Vs. Ito, Ward-1(1)…………………...…..….........……........……...…..…..Respondent Appearances By: Shri Akshay Ringasia, Ar, Appeared On Behalf Of The Appellant. Shri Kailash Gautam, Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 02, 2026 Date Of Pronouncing The Order : February 04, 2026 Order Per Sonjoy Sarma: This Appeal Filed By The Assessee Is Directed Against The Order Of The Nfac, Delhi (Hereinafter Referred To As “Cit(A)”) Dated 02.06.2025 Passed Under Section 250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”).

Section 142(1)Section 144BSection 147Section 148Section 250Section 69Section 69C

which formed the very basis for reopening. However, the Assessing Officer made addition of ₹8,09,714 under section 69 of the Act as unexplained investment, comprising opening capital of ₹5,39,714 and opening stock of ₹2,70,000. Further, addition of ₹2,75,647 under section ... capital of ₹5,39,714 and opening stock of ₹2,70,000 are integral parts of an existing business and cannot be treated as unexplained investments. Similarly, the addition of ₹2,75,647 under section 69C of the Act on account of alleged difference in purchases was made without

Harsh Deep Burman, Nawada vs. Ac/Dc, Ac/Dc Circle Two

In the result, appeal of the assessee is dismissed

ITA 501/PAT/2025[2016-17]Status: DisposedITAT Patna04 Feb 2026AY 2016-17

Bench: SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI LAXMI PRASAD SAHU (Accountant Member)

For Appellant: Shri Vimlesh Kumar, AdvFor Respondent: Sh. Manab Adak, JCIT

Section 133Section 133ASection 139(1)Section 143(2)Section 250Section 69

erred in law and on facts in confirming the addition of 710,00,000/- made u/s 69 towards alleged unexplained investment in purchase of land, ignoring appellant's retraction and evidences. 2 The Ld. CIT(A) erred in confirming the addition of Rs.15,00,000/- u/s 69 towards alleged unexplained

V Gayathri, Krishnagiri vs. ITO, Ward-1, Krishnagiri

The appeal of the assessee is partly allowed

ITA 1871/CHNY/2025[2017-18]Status: DisposedITAT Chennai04 Feb 2026AY 2017-18

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri. S. Jecintha, AdvocateFor Respondent: Ms. Gouthami Manivasagam, J.C.I.T

Section 143(2)Section 143(3)Section 69

income at Rs.18,67,150/-. Out of the sum of Rs.16,09,500/- of cash deposited, addition of Rs.13,09,500/- was made as unexplained investment u/s.69 of the Act, after deducting cash-in-hand to the tune of Rs.3,00,000/-. The Assessing Officer

K V Tex Firm, Chennai vs. Asst. Commissioner of Income Tax, Chennai

Appeals of the assessee stand allowed

ITA 1865/CHNY/2025[2022-23]Status: DisposedITAT Chennai04 Feb 2026AY 2022-23

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri. D. Anand, AdvocateFor Respondent: Shri. Shiva Srinivas, CIT

Section 132Section 139(1)Section 143Section 147Section 44A

present case, the Id.AR contended that the search operations resulted in the recovery of no undisclosed cash, bullion, jewellery, or unexplained investment of any magnitude commensurate with the alleged suppressed sales. The limited investments in jewellery identified outside the books, aggregating about Rs.1,47,25,500/- across

K V Tex Firm, Chennai vs. Asst. Commissioner of Income Tax, Chennai

In the result, all the three appeals of the assessee stand allowed

ITA 1860/CHNY/2025[2020-21]Status: DisposedITAT Chennai04 Feb 2026AY 2020-21

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri. D. Anand, AdvocateFor Respondent: Shri. Shiva Srinivas, CIT

Section 132Section 139(1)Section 143Section 147Section 44A

present case, the ld.AR contended that the search operations resulted in the recovery of no undisclosed cash, bullion, jewellery, or unexplained investment of any magnitude commensurate with the alleged suppressed sales. The limited investments in jewellery identified outside the books, aggregating about Rs.1,47,25,500/- across