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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

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

Appeals of the assessee stand allowed

ITA 1859/CHNY/2025[2021-22]Status: DisposedITAT Chennai04 Feb 2026AY 2021-22

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

Mohd Saleem Rather, Srinagar vs. ITO, Ward 2, Srinagar

The appeal stands partly allowed

ITA 97/ASR/2025[2017-18]Status: DisposedITAT Amritsar03 Feb 2026AY 2017-18

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Shri Udayandasgupta, Jm

For Appellant: Shri Abhinav Vijh (CA) & Shri Sumit LalchandaniFor Respondent: Sh. Charan Dass (Addl. CIT) - Ld. Sr. DR
Section 144

this year. On other bank credits of Rs.186.89 Lacs, Ld. AO estimated income @8%. The cash deposit of Rs.13.96 Lacs was separately added as unexplained investments. 3. The Ld. CIT(A) noted that the assessee was wholesale trader of mobile phones. However, the assessee did not file return of income

Farook Shaikh, North Goa vs. Income Tax Officer, Ward 1(1), North Goa

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

ITA 406/PAN/2025[2016-17]Status: DisposedITAT Panaji03 Feb 2026AY 2016-17

Bench: Shri Pavan Kumar Gadalei T A. Nos. 406/Pan/2025 (A.Y.2016-17) Farook Shaikh, National Faceless Vs H.No.961, Assessment Centre, . Near Syndicate Bank, New Delhi-110003. Sanquelim, North Goa-403505, Goa. Pan.No.Fstps6016N (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) Assessee By Shri.Sanket Bakshi.Ar Revenue By Smt.Rijula Uniyal.Sr.Dr सुनवाई की तारीख/Date Of Hearing 29.01.2026 घोषणा की तारीख/Date Of Pronouncement 03.02.2026 Order Per Pavan Kumar Gadale Jm: The Appeal Is Filed By The Assesse Against The Order Of National Faceless Appeal Centre (Nfac) Delhi / Cit(A) Passed U/Sec147 R,W,S144 & U/Sec 250 Of The Act. The Assesse Has Raised The Grounds Of Appeal Challenging The Order Of The Cit(A) In Not Condoning The Delay In Filling The Appeal & Sustaining The Addition Of Unexplained Investment U/Sec69 Of The Act By The Assessing Officer. 2. The Brief Facts Of The Case Are That, The Assessee Is In Employment Outside India & Has Not Filed The Return Of Income. The Assessing Officer (Ao) Based On The Information From Ddit(Inv) Bangalore In Respect Of Search

Section 144Section 69

grounds of appeal challenging the order of the CIT(A) in not condoning the delay in filling the appeal and sustaining the addition of unexplained investment u/sec69 of the Act by the Assessing Officer. 2. The brief facts of the case are that, the assessee is in employment outside India ... were filed, the AO considering the information available on record has invoked the provisions of Sec. 144 of the Act and made addition of unexplained investment under section 69 of the Act of Rs.10,00,000/- and similarly estimated interest income of Rs.89,075/- and assessed the total income

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

The appeals stand partly allowed

ITA 484/CHANDI/2025[2018-19]Status: DisposedITAT Chandigarh03 Feb 2026AY 2018-19

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

Shri Raghunath Maruti Bhosale, Kolhapur vs. ITO, Ward-2(1), Kolhapur

In the result, the appeal of the assessee is allowed as per terms indicated hereinabove

ITA 2167/PUN/2025[2007-08]Status: DisposedITAT Pune03 Feb 2026AY 2007-08

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.2167/Pun/2025 Assessment Year : 2007-08 Shri Raghunath Maruti Bhosale, Vs. Income Tax Officer, Kalashree, 32B, Laxmi Vasant, Ward-2(1), Kolhapur Jawahar Nagar, Kolhapur-416012 Maharashtra Pan : Aazpb3548D Appellant Respondent

For Appellant: NoneFor Respondent: Date of hearing
Section 1Section 131Section 132Section 143(3)Section 250

before this Tribunal and the short issue for my consideration is whether ld.CIT(A) is justified in confirming the addition of Rs.10.50 lakh for unexplained investment alleged to be made by the assessee making investment towards purchase of flat at Adarsha Cooperative 4 Raghunath Maruti Bhosale Housing Society. From perusal

Honnali Urban Credit Co-Operative Society Limited, Honnali vs. Principal Commissioner of Income Tax-1, Bangalore

In the result appeal filed by the assessee is allowed

ITA 819/BANG/2025[2020-21]Status: DisposedITAT Bangalore03 Feb 2026AY 2020-21

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2020-21

For Appellant: Shri Siddesh N. Gaddi, CAFor Respondent: Shri Shivanand Kalkeri, CIT(DR)(ITAT), Bengaluru
Section 142Section 143(3)Section 263Section 56Section 80Section 80PSection 80P(2)(a)Section 80P(2)(d)

Rs.2,26,970 is assessed at ₹ Page 4 of 16 3,157,451/–. There were several other additions of ₹ 2,837,369 as unexplained investment which is not material or relevant for deciding this issue. The only issue is that the AO has allowed the claim of the assessee

Hasmukh Hiralal Shah, Mumbai vs. ITO 22(1)(6), Mumbai

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

ITA 7532/MUM/2025[2018-19]Status: DisposedITAT Mumbai03 Feb 2026AY 2018-19

Bench: Shri Anikesh Banerjee & Shri Makarand Vasant Mahadeokarhasmukh Hiralal Shah National Faceless 9/13, Nehru Nagar, Opp. Appeal Centre Bdd Chawl No. 9, Worli Vs. /Ito-22(1)(6), Mumbai-400 018 Room No. 206, Piramal Chambers, Parel, Mumbai – 400 012 Pan/Gir No. Aavps2340A (Applicant) (Respondent) Assessee By Shri Vimal Punmiya, Ld. Ar Revenue By Shri Ritesh Misra, Ld. Dr Date Of Hearing 29.01.2026 Date Of Pronouncement 03.02.2026

Section 143(3)Section 249(2)Section 56(2)(x)Section 69

Assessing Officer noted that the assessee had not furnished the source of stamp duty expenses amounting to Rs. 9,31,000/-. Accordingly, the total unexplained investment was worked out at Rs. 1,31,79,000/- and was added under section 69 of the Act. 7. The Assessing Officer further observed ... erred in confirming the addition of Rs.1,31,79,000/- made by the Ld. AO on account of unexplained investment in house property under section 69 of the Income Tax Act,1961. 3. On the facts and in the circumstances of the case

Dhanabalan Selvamuthu Kumar, Erode vs. ITO, Ward-1(5), Erode

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

ITA 1011/CHNY/2025[2011-12]Status: DisposedITAT Chennai02 Feb 2026AY 2011-12

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

For Respondent: Ms. R. Anitha, Addl. CIT
Section 143(3)

wherein the AO made the additions towards: (i) unexplained source for cash deposits in bank accounts amounting to Rs. 65,69,350/-, (ii) unexplained investment in land of Rs. 12,35,579/-, (iii) suppression of capital gains of Rs. 3,50,000/-, and (iv) suppression of interest income amounting ... towards unexplained source for cash deposits in the bank accounts and suppression of capital gains. However, the Ld.CIT(A) sustained the additions made towards unexplained investment in land amounting to Rs. 12,35,579/- and suppression of interest income of Rs. 6,89,271/-. 4. Being aggrieved by the order

Kasiredday Ranadheer Reddy, Bengaluru vs. ACIT, Central Circle-2(1), Bangalore

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

ITA 887/BANG/2025[2017-18]Status: DisposedITAT Bangalore02 Feb 2026AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

Kasiredday Ranadheer Reddy, Bengaluru vs. ACIT, Central Circle-2(1), Bangalore

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

ITA 886/BANG/2025[2016-17]Status: DisposedITAT Bangalore02 Feb 2026AY 2016-17

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

Kasireddy Ranadheer Reddy, Bangalore vs. ACIT, Central Circle-2(1), Bangalore

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

ITA 885/BANG/2025[2013-14]Status: DisposedITAT Bangalore02 Feb 2026AY 2013-14

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

Kasireddy Ranadheer Reddy, Bengaluru vs. ACIT, Central Circle-2(1), Bangalore

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

ITA 884/BANG/2025[2012-13]Status: DisposedITAT Bangalore02 Feb 2026AY 2012-13

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

Kasireddy Ranadheer Reddy, Bangalore vs. ACIT, Central Circle-2(1), Bengaluru

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

ITA 883/BANG/2025[2011-12]Status: DisposedITAT Bangalore02 Feb 2026AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

Kasireddy Ranadheer Reddy, Bengaluru vs. ACIT, Central Circle-2(1), Bangalore

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

ITA 882/BANG/2025[2010-11]Status: DisposedITAT Bangalore02 Feb 2026AY 2010-11

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Shivprasad Reddy, AR &For Respondent: Shri N Balusamy, JCIT (DR)
Section 132Section 259Section 69

registered agreement of sale dated 18-02-2016, which was ultimately cancelled, can justify an addition as unexplained investment, despite the consistent stand of the assessee that only ₹70,00,000/- was paid and the transaction never culminated in a sale. 43.1. At the outset, it is an undisputed fact

DCIT - CC -3(2), Mumbai vs. Mangalkalash Trading Pvt. Ltd., Mumbai

In the result, the appeal of the Revenue is allowed

ITA 576/MUM/2019[2012-13]Status: DisposedITAT Mumbai02 Feb 2026AY 2012-13

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

For Appellant: NoneFor Respondent: Mr. Pankaj Kumar, CIT-DR
Section 132Section 132(4)Section 143(1)Section 143(3)Section 153ASection 68Section 69Section 69C

section 153A on 29.12.2016, wherein the Assessing Officer made a protective addition of ₹5,90,00,000/- under section 68 on account of alleged unexplained investments, and a further protective addition of ₹14,75,000/- under section 69C, being estimated commission at 2.5% for arranging the accommodation entries. 3 Aggrieved ... accommodation entry of the said investment of Rs 5,90,00,000/- also cannot be sustained in principle considering that the protective addition of unexplained investment itself has in principle been deleted and also because the corresponding substantive additions made u/s 69C by the AO in the hands

Smt. Nirmal Puri, Delhi vs. Assistant Commissioner of Income Tax, Delhi

In the result appeal filed by the assessee is dismissed

ITA 5709/DEL/2025[2020-21]Status: DisposedITAT Delhi02 Feb 2026AY 2020-21

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 132Section 142(1)Section 143(2)Section 143(3)Section 250Section 69A

completed by making addition of Rs. 16,72,272/- u/s 69A r.w.s. 115BBE of the Act by holding the bullion weighing 426.600 gms. as unexplained investment of the assessee. 3. Against the said order, assessee preferred appeal before Ld. CIT(A) who vide impugned order dismissed the appeal

Ravinder Kumar Agarwal, Rishikesh vs. CIT(A)-3, Noida

Appeal is allowed

ITA 203/DDN/2025[2013-14]Status: DisposedITAT Dehradun30 Jan 2026AY 2013-14

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwalita No. 203/Ddn/2025 : Asstt. Year: 2013-14 Ravinder Kumar Agarwal, Vs Cit(A)-3, A. R. T.O. Complex, 2Nd M/S Agarwal Jewellers, Mukherji Road, Rishikesh, Floor, Sector-33, Uttarakhand-249201 Noida, Uttar Pradesh-201301 (Appellant) (Respondent) Pan No. Abjpa9045P Assessee By : Sh. Nitish Gupta, Ca Revenue By : Sh. A. S. Rana, Sr. Dr Date Of Hearing: 15.01.2026 Date Of Pronouncement: 30.01.2026 Order Per Satbeer Singh Godara: This Assessee’S Appeal For Assessment Year 2013-14, Arises Against The Cit(A)-3, Noida’S Din & Order No. Itba/Apl/M/250/2025-26/1079253888(1) Dated 04.08.2025, In Proceedings U/S 271(1)(C) Of The Income Tax Act, 1961. 2. Heard Both The Parties At Length. Case File Perused.

For Appellant: Sh. Nitish Gupta, CAFor Respondent: Sh. A. S. Rana, Sr. DR
Section 271(1)(c)

foregoing vehement submissions. This is for the precise reason that once it has come on record that the impugned penalty involves quantum addition of unexplained investment which the assessee could not plead and prove despite having led voluminous detailed evidence, such an instance could not held to be covered under

Balvantrai Amrutbhai Vyas, Rajkot vs. The ITO Ward-2(1)(1), Rajkot.

Appeal is dismissed as “not pressed

ITA 238/RJT/2025[2011-12]Status: DisposedITAT Rajkot30 Jan 2026AY 2011-12

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

For Appellant: Shri Ms. Devina Patel, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Section 115BSection 144Section 250Section 271(1)(c)Section 68Section 69A

Delhi erred in confirming the action of the ITO, wd-2(1)(1), Rajkot in making addition of Rs.20,00,000/- by way of unexplained investment u/s. 69A of the Act and thereby levying taxes at rates u/s. 115BBE of the Act. 7. On merits, the Learned Commissioner (Appeals), NFAC

Madhu Devi, Nawada vs. ITO, Ward 2 (3), Biharsharif, Patna

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

ITA 516/PAT/2025[2014-15]Status: DisposedITAT Patna30 Jan 2026AY 2014-15

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 139Section 143Section 147Section 148ASection 250

assessee could not produce any documentary evidence explaining the source of the investment made by her, the Ld. AO treated the same as unexplained investment u/s 69 of the Act and added the same to the total income of the assessee and the assessment was made assessing the total income

Karunesh Kumar Shukla, Lucknow vs. Income Tax Officer-1(1), Lucknow

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

ITA 668/LKW/2025[2018-19]Status: DisposedITAT Lucknow30 Jan 2026AY 2018-19
For Appellant: Sh. Samrat Chandra, C.AFor Respondent: Sh. Koushlendra Tiwari, CIT DR
Section 144Section 148Section 69Section 69A

case, the Ld. CIT(A) has erred in law and in facts in adding an amount of Rs. 85,00,000/- as unexplained investment u/s 69 of The Income Tax Act, 1961. 4. Because without considering the facts and circumstances of the case, the CIT(A) has erred ... account of sale of investment in immovable properties, an addition of Rs. 85,00,000/- on account of unexplained investment in time deposits and Rs. 29,91,000/- as unexplained money under section 69A. 3. Aggrieved by the said assessment order, the assessee filed an appeal before the NFAC. However