“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

Firoz Pasha, Gaziabad vs. ITO, Ward-1(2), Gaziabad

Appeal is allowed for statistical purposes in very terms

ITA 254/DEL/2024[2012-13]Status: DisposedITAT Delhi13 Nov 2024AY 2012-13

Bench: Shri Satbeer Singh Godara[Assessment Year: 2012-13

Section 250Section 250(6)Section 69

parties at length. Suffice to say, it emerges during the course of hearing that both the learned lower authorities have added the alleged unexplained investment u/s 69 of the Act amounting to Rs. 29.32 lakhs in assessee’s hands. Mr. Sharma vehemently argues in reiterating the Revenue’s stand that

Harpreet Kaur Kaushik Manek, Bhavnagar vs. The Dy.CIT., Circle-1, Bhavnagar

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

ITA 109/AHD/2024[2011-12]Status: DisposedITAT Ahmedabad12 Nov 2024AY 2011-12

Bench: Ms. Suchitra Kamble & Shri Makarand Vasant Mahadeokarassessment Year: 2011-12

Section 133(6)Section 139Section 142(1)Section 147Section 148Section 234ASection 271(1)(c)Section 69

limitation. 2. The Ld. CIT(A) has erred in law and on facts of the case in confirming addition of Rs.43,75,090/- as unexplained investment u/s.69 of the Act. 3. The Ld. CIT(A) has erred in law and on facts of the case in confirming addition of margin ... income was filed by the assessee, therefore, 8% of such total turnover amounting to Rs.43,75,089/- should be taken as unaccounted and unexplained investment under Section 68 of the Act. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed

Vmk Image, Pune vs. The Income Tax Officer, Ward-8(3), Pune

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

ITA 1974/PUN/2024[2014-15]Status: DisposedITAT Pune12 Nov 2024AY 2014-15

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1974/Pun/2024 "नधा"रण वष" / Assessment Year : 2014-15

For Appellant: NoneFor Respondent: Shri Arvind Desai

Section 139(1)Section 142(1)Section 147Section 148Section 250Section 250(4)Section 250(6)Section 251Section 251(1)(a)Section 69

That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in treating Rs.2,16,00,000/- as unexplained investment under section 69. 2. The appellant craves leave to add/delete/modify amend all or any of the grounds of appeal.” 3. When the matter was called ... order dated 22.03.2022 completed the assessment u/s.147 r.w.s.144B of the Act. While doing so, the AO made addition of Rs.2,16,00,000/- as unexplained investment invoking the provisions of section 69 of the Act. 3 VMK Image 5. Being aggrieved by the above assessment order, assessee preferred an appeal

Ravindra Bhausaheb Madhavai, Nashik vs. ITO Ward 1(1), Nashik

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

ITA 1737/PUN/2024[2013-14]Status: DisposedITAT Pune12 Nov 2024AY 2013-14

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1737/Pun/2024 "नधा"रण वष" / Assessment Year : 2013-14

For Appellant: NoneFor Respondent: Shri Arvind Desai

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

putforth by the assessee, the AO invoking the provisions of section 69 of the Act treated the cash deposits of Rs.62,91,000/- as unexplained investment in the hands of assessee. 8. The Assessing Officer further observed that the assessee made payment of Rs.77,90,935/- to the contractors ... also made addition of Rs.36,48,685/- on account of variation in the opening and closing stock shown by the assessee as unexplained investment u/s.69 of the Act. Thus, the AO assessed the income of assessee at Rs.1,15,88,690/- as against the returned income of Rs.8

Shivam Readymix Private Limited, Neemuch vs. The PCIT(Central), Jaipur

In the result, the appeal of the assessee is allowed

ITA 412/JPR/2024[2013-14]Status: DisposedITAT Jaipur12 Nov 2024AY 2013-14

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Tarun Mittal (C.A.)For Respondent: Ms. Alka Gautam (CIT)

Section 143(3)Section 153ASection 153DSection 263Section 69C

Officer has issued specific show cause notice to the assessee as to why the excess stock of " 2,25,75,951/- be treated as unexplained investment under Section 69 of the IT Act which the assessee replied stating that the said excess business stock was found during survey proceedings under

Kavita Gupta, Preet Vihar, Delhi vs. Deputy Commissioner of Income Tax, Delhi

In the result, the Appeal of the Assessee is allowed

ITA 640/DEL/2024[2021-22]Status: DisposedITAT Delhi12 Nov 2024AY 2021-22

Bench: Shri S. Rifaur Rahman & Shri Yogesh Kumar U.S.Ita No. 640/Del/2024, (A.Y.2021-22)

Section 132Section 143(2)Section 143(3)Section 153ASection 153CSection 69

been completed u/s 143(3) of the Act vide order dated 30/12/2022 by making an addition of Rs. 50,00,000/- on account of unexplained investment u/s 69 of the Act. Aggrieved by the assessment order dated 30/12/2022, the Assessee preferred an Appeal before

Sanjay Jewellers Private Limited, Faridabad vs. DCIT, Central Circle 2, Faridabad

In the result Ground No.1 & 2 raised by the assessee are allowed

ITA 1045/DEL/2024[2019-20]Status: DisposedITAT Delhi12 Nov 2024AY 2019-20

Bench: Sh. Pradip Kumar Kedia & Shri Yogesh Kumar U.S.I.T.A. No. 1045/Del/2024 (A.Y 2019-20)

For Appellant: Sh. Jinendra Wadhwa, Adv

Section 115Section 115BSection 133ASection 5Section 69Section 69A

invocation of provisions of section 69 of the Act on the surrendered amount of Rs. 1,60,00,000/- treating the same to be unexplained investment against declared business income which is arbitrary and unjustified. 2. That the provisions of Section 69 are not attracted ... invocation of provision of Section 69 of the Act on the surrendered amount of Rs. 1,60,00,000/- treating the same to be unexplained investment against the declared businessincome which is arbitrary and unjustified. The Ld. Counsel relying on the plethora of Judgments sought for deletion of the addition

Anmol Developers, Ahmedabad vs. Addl/Jt/Dy./ITO, National Faceless Assessment Centre, Delhi Present Jurisdiction the ITO, Ward-1(1)(1), Ahmedabad

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

ITA 345/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad11 Nov 2024AY 2017-18

Bench: Ms. Annapurna Gupta (Accountant Member), Shri TR Senthil Kumar (Judicial Member)

For Appellant: Shri Jimi Patel, A.RFor Respondent: Shri V. Nandakumar, CIT-D.R

Section 142(1)Section 144Section 147Section 148Section 249(4)Section 249(4)(b)Section 271FSection 69

issued to the assessee as to why not to treat the purchase of immoveable property of Rs. 7.22 crores as unexplained investment. Since there was no response to the above show cause notice, the Assessing Officer treated the above investment of Rs. 7.22 crores as unexplained u/s. 69 and added ... assessee and disrespecting the statutory notices issued by the authorities concerned. 5.4 But on merits only addition made in this case is unexplained investment made in the immoveable property of Rs. 7.22 crores u/s. 69 of the Act. Such addition which deemed to be income of the assessee is precluded

Dattatray Ramdas Gaikwad, Pune vs. Commissioner of Income Tax (Appeals), Pune

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

ITA 1556/PUN/2024[2020-21]Status: DisposedITAT Pune11 Nov 2024AY 2020-21

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2020-21

For Appellant: Shri Harsh S. Bhuta (through virtual)For Respondent: Shri Amol Khairnar, CIT-DR

Section 132Section 132(4)Section 142(1)Section 144Section 69A

assessee. We find the Assessing Officer in the instant case made addition of Rs.50,00,000/- as unexplained cash and Rs.30,22,348/- as unexplained investment in jewellery by invoking the provisions of section 69A r.w.s. 115BBE of the Act on the ground that the assessee failed to explain

Gajulapalli Shoban Babu, Hyderabad vs. Dy. Commissioner of Income Tax, Central Cirlce, Tirupati

In the result, appeals filed by the assessee for the A

ITA 298/HYD/2020[2012-13]Status: DisposedITAT Hyderabad08 Nov 2024AY 2012-13

Bench: Shri Mahavir Singh, Hon'Ble Vice- & Shri Manjunatha, G. Accountant Hon'Bleआ.अपी.सं /Ita Nos.296, 297 & 298/Hyd/2020 (िनधा"रण वष"/Assessment Years: 2010-11, 2011-12 & 2012-13) Shri Gajulapalli Shoban Vs. Dy. C. I. T. Babu Central Circle 2(2) Hyderabad Tirupati Pan:Agfpg4314G (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Mohd.Afzal, Advocate राज" व "ारा/Revenue By:: Shri B. Balakrishna, Dr सुनवाई की तारीख/Date Of Hearing: 23/09/2024 घोषणा की तारीख/Pronouncement: 08/11/2024 आदेश/Order

For Appellant: Shri Mohd.Afzal, AdvocateFor Respondent: : Shri B. Balakrishna, DR

Section 132Section 153ASection 153D

during the course of assessement proceedings, the Assessing Officer called upon the assessee to explain as to why addition shall not be made towards unexplained investment in film financing business. In response, the assessee submitted that he has received loans and advances from various associates/ lenders and the same ... Para 3 on page 2 & 3 of the assessment order. The Assessing Officer made addition towards the loan given to various film producers as unexplained investment on the ground that the assessee could not explain the source for the loans and also not able to file necessary evidences to prove

Gajulapalli Shoban Babu, Hyderabad vs. Dy. Commissioner of Income Tax, Central Cirlce, Tirupati

In the result, appeals filed by the assessee for the A

ITA 297/HYD/2020[2011-12]Status: DisposedITAT Hyderabad08 Nov 2024AY 2011-12

For Appellant: Shri Mohd.Afzal, AdvocateFor Respondent: : Shri B. Balakrishna, DR

Section 132Section 153ASection 153D

Gajulapalli Shoban Babu, Hyderabad vs. Dy. Commissioner of Income Tax, Central Circle, Tirupati

In the result, appeals filed by the assessee for the A

ITA 296/HYD/2020[2010-11]Status: DisposedITAT Hyderabad08 Nov 2024AY 2010-11

For Appellant: Shri Mohd.Afzal, AdvocateFor Respondent: : Shri B. Balakrishna, DR

Section 132Section 153ASection 153D

Ashok Vikram Poddar, Kolkata vs. ACIT, Circle -34, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1294/KOL/2023[AY 2016-17]Status: DisposedITAT Kolkata08 Nov 2024

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(3)Section 69A

citing the same reasons. However, in stead of addition u/s 69A ,the Ld. CIT(A) directed the AO to treat the same as unexplained investments u/s 69A of the Act. 3 I.T.A. No.1294/Kol/2023 Assessment Year: 2016-17 Ashok Vikram Poddar 6. After hearing the rival contentions and perusing the material

Deputy Commissioner of Income Tax, Chennai vs. Rangaswamy Bhaskaran, Kodungaiyur

In the result, appeal filed by the In the result, appeal filed by the Revenue is dismissed

ITA 1353/CHNY/2024[2018-19]Status: DisposedITAT Chennai08 Nov 2024AY 2018-19

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr.D. Anand, AdvocateFor Respondent: Mr.Nilay Baran Som, CIT

Section 132

however rejected the same and added affidavits before the ITO. The ITO however rejected the same and added the jewellery as unexplained investment of the assessee. On appeal the the jewellery as unexplained investment of the assessee. On appeal the the jewellery as unexplained investment of the assessee. On appeal ... controverted by the ITO, the possession of the assessee, which was not controverted by the ITO, and deleted the addition made by way of unexplained investment in and deleted the addition made by way of unexplained investment in and deleted the addition made by way of unexplained investment in jewellery

Anjaiah Yadav Alam, Hyderabad vs. ITO., Ward-15(1), Hyderabad

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

ITA 1037/HYD/2024[2015-16]Status: HeardITAT Hyderabad07 Nov 2024AY 2015-16

Bench: Shri Inturi Rama Raoआ.अपी.सं /Ita No.1037/Hyd/2024 (िनधा"रण वष"/Assessment Year: 2015-16) Shri Anjaiah Yadav Alam Vs. Income Tax Officer Hyderabad Ward 15(1) Pan:Aenpa3122J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: N O N E राज" व "ारा/Revenue By:: Shri Aravindakshan, Dr सुनवाई की तारीख/Date Of Hearing: 07/11/2024 घोषणा की तारीख/Pronouncement: 07/11/2024 आदेश/Order

For Appellant: N O N EFor Respondent: : Shri Aravindakshan, DR

Section 139Section 147Section 148

While doing so, the Assessing Officer made addition of Rs.10,06,000/- being the investment made on the purchase of property treating it as unexplained investment rejecting the contention of the appellant that the said property was disclosed in the return of income of the HUF. 3. Being aggrieved ... Page 2 of 4 ITA No 1037 of 2024 Anjaiah Yadav Alam 6. The Assessing Officer made an addition of Rs.10,06,000/- as unexplained investment in the purchase of property. The appellant explained that the said property was purchased in the status of HUF of the appellant and without