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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

Ram Kumar, Nehru Garden Colony vs. ITO Ward 2, Kaithal

Appeal of the assessee is allowed for statistical purposes

ITA 415/CHANDI/2024[2011-12]Status: DisposedITAT Chandigarh27 Sept 2024AY 2011-12

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

For Appellant: Shri Sanjay Kumar Singla, AdvocateFor Respondent: Dr. Ranjeet Kaur, Addl. CIT, Sr. DR
Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 246ASection 250Section 253Section 69

supra) and SBI Account (supra) and explanation of the assessee was found to be not satisfactory and consequently assessed Rs. 20,70,000/- as unexplained investment under section 69 of the Act. The said addition of Rs. 20,70,000/- was added to returned income ... 26/06/2019 the Ld. AO imposed penalty of 100% on the assessee under section 271(1)(c) of the Act. The core reason was unexplained investment made by the Assessee of cash deposit of Rs. 20,70,000/- which was confirmed by the assessment order dt. 11/12/2018 passed under section

ITO, Ward-3(3)(3), Ahmedabad vs. Niyati Sanket Shah, Ahmedabad

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

ITA 723/AHD/2019[2011-12]Status: DisposedITAT Ahmedabad27 Sept 2024AY 2011-12

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 132Section 143(1)Section 143(3)Section 148Section 50C

solitary ground that Ld. CIT(A) erred in law on facts in deleting the addition of Rs.4,54,11,394/- on account of unexplained investment from unaccounted source of income by the assessee. 7. Ld. Sr. D.R. appearing for the Revenue supported the order passed by the Assessing Officer. However

Neha Wadhwa, Kota vs. Income Tax Officer, Ward 6(1), Jaipur

In the result, the appeal of the assessee is allowed

ITA 950/JPR/2024[2016-17]Status: DisposedITAT Jaipur27 Sept 2024AY 2016-17

Bench: Ld. Cit(A).

For Appellant: Sh. C M Birla, CAFor Respondent: Sh. Monisha Choudhary, Addl.CIT
Section 142(1)Section 143(2)Section 143(3)Section 269SSection 68

whereby the Tribunal held that it is not a case of introduction of cash credit but it is a case of unexplained investment under Section 69 of the Act of 1961 and the appropriate previous year for inclusion is the relevant financial year and, therefore, the opening capital account cannot ... added as an unexplained investment under Section 69 of the Act of 1961 for the asst. yr. 1993-94. The Tribunal also held that the genuineness of the capital introduction has already been adjudicated upon by the assessing authority for the appropriate financial year relevant to asst

Dinesh Kumar Soni, Jaipur vs. DCIT Cen Cir 1 Jaipur, Jaipur

In the result appeal filed by the assessee is allowed

ITA 863/JPR/2024[2017-18]Status: DisposedITAT Jaipur27 Sept 2024AY 2017-18

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

For Appellant: Shri Pawan Kumar Garg (C.A.)For Respondent: Smt. Monisha Choudhary (Addl.CIT) a
Section 142(1)Section 143(2)Section 143(3)Section 44ASection 68Section 69C

assessee or not. Further alternatively such amount Rs. 12,90,178 having found its place in the bank account is also taxable as unexplained investment u/s 69 of the Act. Accordingly this ground of appeal is hereby dismissed.” 5. Aggrieved from the order of the ld. CIT(A) the assessee

Income Tax Office, Ward-6(2), Jaipur vs. Medical Designs India Pvt. Ltd., Jaipur

In the result the appeal of the Revenue stands dismissed

ITA 236/JPR/2024[2011-12]Status: DisposedITAT Jaipur27 Sept 2024AY 2011-12
For Appellant: Shri Ratan Lal Goyal (C.A.) &For Respondent: Shri Arvind Kumar (CIT)
Section 127Section 142(1)Section 144Section 147Section 148

purchase of immovable property, therefore, the same was added into the total income of the assessee company u/s. 69B of the Act as unexplained investment. 4. Aggrieved from the order of the assessment making addition, assessee preferred an appeal before the Id. CIT(A)/NFAC. Based on the various aspects ... appellant did not replied to any notice and therefore the AO has made addition of Rs. 5,57,69,640/- on account of unexplained investment u/s 69B of the Act. During the appellate proceedings, the appellant has filed the additional evidences in support of his contention and the same were

Income Tax Officer Ward 1(1), Kolhapur vs. Parth Corporation, Gadhinglaj, Kolhapur

Appeal is dismissed in above terms

ITA 1131/PUN/2023[2017-18]Status: DisposedITAT Pune26 Sept 2024AY 2017-18

Bench: Shri Rama Kanta Panda & Shri Satbeer Singh Godara

For Respondent: Shri Nikhil Pathak
Section 147Section 151Section 46A(3)Section 69

very fairly submit that the Revenue’s instant appeal seeks to revive the Assessing Officer’s action making section 69 read with Section-115BBE unexplained investments addition of Rs.9,46,00,000/-; in the course of assessment dated 17.03.2022; as reversed in the lower appellate discussion as follows : 3 ITA.No

Retain Tie Up Private Limited, Kolkata vs. Assistant Commisioner of Income Tax, Kolkata

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

ITA 1030/KOL/2024[2015-16]Status: DisposedITAT Kolkata26 Sept 2024AY 2015-16

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A. No.1030/Kol/2024 Assessment Year: 2015-16 Retain Tie Up Pvt. Ltd………………....…………….......…....………....Appellant 42/1, Bb Ganguly Street, Kolkata – 700012. [Pan: Aafcr1153D] Vs. Acit, Ward-1(3), Kolkata......................................................…..…..... Respondent Appearances By: None Appeared On Behalf Of The Appellant. Shri A. Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : September 26, 2024 Date Of Pronouncing The Order : September 26, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 22.03.2024 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. No One Has Put In Appearance On Behalf Of The Assessee Despite Notice, Therefore, We Proceed To Decide The Appeal After Hearing The Ld. Dr & Perusing The Materials Available On Record. 3. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. On Facts & Circumstances Of The Case, The Learned Cit(A) Has Grossly Erred In Not At All Considering The Written Submissions As Uploaded By The Appellant Company & Thereby By Passing A Non- Speaking Order, Without Even Discussing The Merits Of The Case And

Section 144Section 14ASection 250Section 69

grouping in the ITR, the system showed new investment, which is not the fact at all. Hence, the impugned addition u/s. 69 alleging unexplained investment in the year under consideration needs to be deleted outrightly as being absolutely erroneous, illegal and bad-in-law. 3. On facts and circumstances

Anilkumar Sukumaran, Alappuzha vs. The Asst.Commissioner of Income Tax, Alappuzha

In the result, the appeal by the assessee is allowed and the stay petition is dismissed as infructuous

ITA 689/COCH/2023[2017-18]Status: DisposedITAT Cochin26 Sept 2024AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Respondent: Smt.Girly Albert, Sr.DR
Section 143(3)Section 69

legal tender after the demonetization scheme pronounced on 08thNovember, 2016. Accordingly, the Assessing Officer was of the view that such cash deposits represent an unexplained investment and therefore added the same to the total income of the assessee. 4. Aggrieved, the assessee preferred an appeal before the learned

M/S Rana & Joshi Buildtech P Ltd, Indore vs. The PCIT-1, Bhopal

In the result, the appeal of the assessee is allowed

ITA 229/IND/2023[2015-16]Status: DisposedITAT Indore26 Sept 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanim/S. Rana & Joshi Buildtech Pr. Cit-1 Pvt. Ltd. Bhopal (Formerly Known As M/S Rana Buildtech Pvt. Ltd. ) Vs. 218 Civil Lines, Below Dainik Bhaskar Office Vidisha (Appellant / Assessee) (Respondent/ Revenue) Pan: Aafcr9858P Assessee By Shri S.N. Agrawal Ar Revenue By Shri Ram Kumar Yadav, Cit-Dr Date Of Hearing 11.09.2024 Date Of Pronouncement 26 .09.2024

Section 143(3)Section 263Section 271E

under consideration or not. The AO has even examined the issue of payment of stamp duty and unexplained expenditure on this account and also unexplained investment and given all the details of transaction of purchase of land as under: Land Owner Registered land Stamp Value Purchase Price owner Phool Singh

Sohan Lal Saini, Jaipur vs. ITO 7(2), ITO

In the result, the appeal of the assessee deserves to be allowed

ITA 995/JPR/2024[2017-18]Status: DisposedITAT Jaipur26 Sept 2024AY 2017-18

Bench: The Date Of Hearing Of Appeal.”

For Appellant: Mrs. Suhani Meharwal, CAFor Respondent: Smt. Monisha Choudhary (Addl. CIT)
Section 143(2)Section 143(3)Section 69A

Appellate Tribunal (ITAT) deleted an addition made by the assessing office under section 69 of the Income Tax Act,1961 on the ground of unexplained investment in a bank account. Hon’ble bench held that the assessee had not made any unexplained investment in the bank account and whatever deposits

V V Collection, Talai Bazar vs. Income Tax Officer, Ambala Road Kaithal

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

ITA 153/CHANDI/2024[2017-18]Status: DisposedITAT Chandigarh25 Sept 2024AY 2017-18

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

For Appellant: Shri Sanjay Kumar Singla, AdvocateFor Respondent: Smt. Kusum Bansal, CIT DR
Section 147Section 148Section 151Section 151(1)Section 69

completed under section 147 r.w.s 144B of the Act wherein the AO brought to tax a sum of Rs. 3,07,00,000/- as unexplained investment under section 69 r.w.s 115BBE of the Act which, on appeal, has been confirmed by the Ld. CIT(A) and against the said order

Kumud Lahu Phadke, Raigad vs. ITO Ward 2 Panvel, Panvel

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

ITA 577/PUN/2024[2013-14]Status: DisposedITAT Pune25 Sept 2024AY 2013-14

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Nikhil S. Pathak &For Respondent: Shri Ramnath P. Murkunde
Section 144Section 148Section 69A

much as the cash withdrawals are not to the tune of Rs.28,60,000/- and Rs.12,70,000/- which are added as unexplained investment u/s 69A by the learned AO and therefore the additions made of Rs.28,60,000/- and Rs.12,70,000/- are not correct. 3) The learned

Income Tax Officer, Ward-6(1), Hyderabad vs. Indira Vengala, Hyderabad

ITA 587/HYD/2024[2018-19]Status: DisposedITAT Hyderabad25 Sept 2024AY 2018-19

Bench: Shri Mahavir Singh, Vice- & Shri Manjunatha G.Assessment Year – 2018-19 Income Tax Officer, Late Indira Vengala, Hyderabad. Ward 6(1), Hyderabad. Represented By Legal Heir Vengala Sanjeev Kumar, Hyderabad. Pan : Bbopv2537D (Appellant) (Respondent) C.O.No.10/Hyd/2024 Arising Out Of Ita No.587/Hyd/2024 Assessment Year – 2018-19 Late Indira Vengala, Income Tax Officer, Hyderabad. Ward6(1), Hyderabad. Represented By Legal Heir Vengala Sanjeev Kumar, Hyderabad. Pan : Bbopv2537D (Cross Objector) (Respondent) Assessee By: Shri Pavan Kumar Gorti, Ca. Revenue By: Shri Srinath Sadanala, Sr.A.R. Date Of Hearing: 23.09.2024 Date Of Pronouncement: 25.09.2024

For Appellant: Shri Pavan Kumar Gorti, CAFor Respondent: Shri Srinath Sadanala, Sr.A.R
Section 147Section 54(1)

response to notice u/s 148 of the Act and moreover, the assessee has not offered any explanation with regard to source of such unexplained investment made in :5: ITA No.587/Hyd/2024 & C.O.10/Hyd/2024 purchase of immovable property. Hence, the Assessing Officer denied the claim of deduction ... taxed both the transactions as addition in respect of immovable property transaction being long term capital gain and similarly made addition on account of unexplained investment u/s 69 of the Act. The CIT(A)-NFAC after considering the facts and documents, noted that the assessee has earned long term capital

Vasamsetty Gangadhara Rao, Rajahmundry vs. Income Tax Officer, Ward-2(1), Rajahmundry

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

ITA 325/VIZ/2024[2016-17]Status: DisposedITAT Visakhapatnam25 Sept 2024AY 2016-17

Bench: Shri Duvvuru Rl Reddy, Hon’Bleआयकर अपील सं./ I.T.A. No.325/Viz/2024 (िनधा"रण वष" / Assessment Year : 2016-17) Vasamsetty Gangadhara Rao, Vs. The Income Tax Officer, Rajahmundry. Ward-2(1), Pan: Aevpa2543M Rajahmundry. (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ" क" ओर से/ Appellant By : Sri Gvn Hari, Ar ""याथ" क" ओर से / Respondent By : Dr. Aparna Villuri, Sr. Ar सुनवाई क" तारीख / Date Of Hearing : 23/09/2024 घोषणा क" तारीख/Date Of : 25/09/2024 Pronouncement O R D E R

For Appellant: Sri GVN Hari, ARFor Respondent: Dr. Aparna Villuri, Sr. AR
Section 142(1)Section 143(2)Section 147Section 148Section 271(1)(c)Section 69

appeal. 3. The Ld. CIT(A) ought to have deleted the addition of Rs. 16,17,925/- made by the AO towards alleged unexplained investment in purchase of property. 4. Any other ground that may be urged at the time of appeal hearing.” 4. At the outset, the Ld. Authorized

Melathur Service Co-Operative Bank Ltd, Malappuram vs. ITO, Ward-4, Tirur

Appeal is allowed for statistical purposes

ITA 167/COCH/2024[2017-2018]Status: DisposedITAT Cochin25 Sept 2024AY 2017-2018

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singhmelattur Service Co-Op. Bank Ltd. The Income Tax Officer Melttur P.O. Ward - 4, Tirur Vs. Malapuram 679326 [Pan: Aacam8880H] (Appellant) (Respondent)

For Appellant: Ms. Swathi S., AdvocateFor Respondent: Smt. V. Swarnalatha, Sr. D.R
Section 250Section 69Section 80P

notice with the able assistance coming from the Revenue side that both the learned lower authorities have made section 69 r.w.s 115 unexplained investment addition of Rs.1,25,33,000/- as well as recomputed business income by disallowing/ adding various heads of depreciation, etc. to the tune of Rs.1

Johnson Neduvelil John, Trivandrum vs. ITO, Ward-2(1), Trivandrum

Appeal is allowed for statistical purposes in above terms

ITA 144/COCH/2024[2015-2016]Status: DisposedITAT Cochin25 Sept 2024AY 2015-2016

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singhjohnson Neduvelil John The Income Tax Officer - 2(1) Q3, Soundarya Apartments Aayakar Bhavan, Kowdir Nandavanan, Vikas Bhavan P.O. Vs. Trivandrum 695003 Trivandrum 695033 [Pan: Acfpj0197C] (Appellant) (Respondent)

For Appellant: ------- None -------For Respondent: Smt. V. Swarnalatha, Sr. D.R
Section 250Section 250(6)Section 69

that the CIT(A)/NFAC has passed exparte order confirming the Assessing Officer’s action making section 69 addition in question on account of unexplained investment 2 Johnson Neduvelil John without dealing with the relevant factual matrix as contemplated u/s. 250(6) of the Act requiring him to frame points

Income Tax Officer, Ward-1, Kottayam vs. Sunitha Menon, Kottayam

Appeal is allowed

ITA 114/COCH/2024[2017-18]Status: DisposedITAT Cochin25 Sept 2024AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: --- None---For Respondent: Smt.V.Swarnalatha, Sr.DR
Section 143(3)Section 145(3)Section 68

this issue and direct the A.O. to delete this disallowance." 8.1.6 The addition has been made by the A.O. as unexplained investment has been carefully examined. Based on the various judicial pronouncements as quoted above and the facts of the appellant's case also being similar

M/S. Maa Momai Realty Pvt Ltd, Mumbai vs. Income Tax Officer Ward 5(2)(4), Mumbai

In the result, the appeal is dismissed

ITA 2373/MUM/2024[2010-11]Status: DisposedITAT Mumbai25 Sept 2024AY 2010-11

Bench: Shri Ms Kavitha Rajagopal & Shri Ratnesh Nandan Sahayassessment Year: 2010-11 M/S. Maa Momai Realty Income Tax Officer- Pvt. Ltd. 5(2)(4) 17/A, Kanti Bhavan, Lalbaug, Ground Floor, Parel, 1St Parsiwada Lane, Vs. Mumbai- 400011. Mumbai- 400004. Pan: Aagcm2087E (Appellant) (Respondent)

For Appellant: Shri Kiran Unavekar, SR. D.R
Section 147Section 250Section 269SSection 68

Y.2010-11 wherein it has been held that no addition can be made under section 68 of the Act on account of unexplained investments where the assessee furnished before the AO the evidences to prove identity of the investors.” 5. We have considered the facts of the case and the submissions

Shri Deepak Ambadas Nagargoje, Ahmednagar vs. ITO Ward 2, Ahmednagar(Jao), Ahmednagar

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

ITA 1218/PUN/2024[2013-14]Status: DisposedITAT Pune24 Sept 2024AY 2013-14

Bench: Shri R. K. Panda & Ms Astha Chandraassessment Year : 2013-14

For Appellant: Shri Ketan DhootFor Respondent: Shri Ramnath P Murkende
Section 142(1)Section 144Section 147Section 148Section 69

appeal filed by the assessee against the ex-parte order of the Assessing Officer making the addition of Rs.1,02,12,720/- as unexplained investment u/s 69 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2 3. Facts of the case in brief ... Assessing Officer in the order passed u/s 144 r.w.s. 147 r.w.s. 144B of the Act made addition of Rs.1,02,12,720/- as unexplained investment u/s 69 r.w.s. 115BBE of the Act. The above amount was determined by the Assessing Officer on the ground that the assessee had purchased

Income Tax Officer, Ward-5(3), Nagpur vs. Shri Waman Mahadeorao Sarode, Nagpur

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

ITA 189/NAG/2022[2016-17]Status: DisposedITAT Nagpur24 Sept 2024AY 2016-17

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

For Appellant: Smt. Veena AgrawalFor Respondent: Shri Abhay Y. Marathe
Section 147Section 148Section 250(4)Section 56(2)(vii)

aggregating to ` 28,15,680, paid in cash, the sources of which are not explained by the assessee are treated as unexplained investment under section 69 of the Act and added to the income of the assessee. As the assessee has given possession on the date of registry ... Rs.16,35,000/- for purchase of immovable property and a sum of Rs.11,80,680/- for registration charges, under the head of unexplained investment u/s 69 of the Act. It is the case of the Ld. Assessing Officer that the assessee has not explained the sources of the investment