“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

Smt. Deepinder Kaur Johal, Patiala vs. ITO, Ward-4, Patiala

ITA 532/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh30 Aug 2024AY 2012-13

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ANDSHRI PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Tej Mohan Singh. AdvocateFor Respondent: Shri ManpreetDuggal, JCIT, Sr.DR

Section 142(1)Section 143(2)Section 147Section 148Section 250Section 253

above, the A.O. made the addition of the difference amount of Rs.23,20,000/- (i.e.83,20,000/- minus Rs.60,00,000/-) as assessee's unexplained investment from undisclosed source in the assessment order. 9. Aggrieved by the order of the AO, the assessee has contested the additions before the appellate ... facts in assuming jurisdiction u/s 147/148. 2. Ld. A.O. erred in law and on facts in making addition of Rs.2320000/- as unexplained investment on conjectures and surmises. 3. The Id. A.O. gravely erred in charging interest under section 234A, 234B and 2340. The Id. A.O. gravely erred in charging interest

Vinod Narayan Joshi, Vadodara vs. The Pr. CIT, -1, Vadodara

ITA 44/AHD/2022[2012-13]Status: DisposedITAT Ahmedabad30 Aug 2024AY 2012-13

Bench: Shri Tr Senthil Kumar & Shri Makarand V. Mahadeokarआयकरअपीलसं./Ita No. 230 /Ahd/2021 धििाधरणवरध/Asstt. Year: 2011-2012 & आयकरअपीलसं./Ita No. 44/Ahd/2022 धििाधरणवरध/Asstt. Year: 2012-13 Vinod Narayan Joshi, The Principal Af-6, Utopian Corner, Commissioner Of बिाम Nr. Green Wood Bunglows, Income Tax, Vs. New Alkapuri, Vadodara-1, Vadodara-390021. Vadodara.

For Appellant: Shri Hemant Suthar, ARFor Respondent: Shri H Phani Raju, CIT. DR

Section 143(1)Section 143(3)Section 147Section 148Section 263

Patel and Mehul Pandya, should not be treated as ITA No.230 /Ahd/2021 & Ninod Narayan Joshi vs. PCIT Asst. Years 2011-12 2012-13 7 unexplained investment u/s 69 of the Act. The assessee replied to the said notice and denied the same with a request to provide evidence and opportunity

Vinod Narayan Joshi, Vadodara vs. The Pr. CIT, -1, Vadodara

ITA 230/AHD/2021[2011-12]Status: DisposedITAT Ahmedabad30 Aug 2024AY 2011-12

For Appellant: Shri Hemant Suthar, ARFor Respondent: Shri H Phani Raju, CIT. DR

Section 143(1)Section 143(3)Section 147Section 148Section 263

Patwardhan Hospital, Aurangabad vs. PCIT-1, Nashik

Appeal is dismissed

ITA 994/PUN/2024[2019-20]Status: DisposedITAT Pune30 Aug 2024AY 2019-20

Bench: Shri Satbeer Singh Godara & Shri G. D. Padmahshaliआयकर अपील सं. / Ita No.994/Pun/2024 िनधा"रण वष" / Assessment Year: 2019-20 Patwardhan Hospital, Vs. Pcit-1, Nashik. Bansilal Nagar Padampura, Station Road, Chhatrapati Sambhajinagar, Aurangabad- 431001. Pan : Aaefp2233Q Appellant Respondent Assessee By : Shri S.N. Puranikh Revenue By : Shri Ajay Kumar Keshari Date Of Hearing : 27.08.2024 Date Of Pronouncement : 30.08.2024 आदेश / Order Per Satbeer Singh Godara, Jm: This Assessee’S Appeal For Assessment Year 2019-20 Arises Against The Pcit-1, Nashik’S Order Dated 19.03.2024 Passed In Case No. Itba/Rev/F/Rev5/2023-24/1062957332(1) Involving Proceedings U/S 263 Of The Income Tax Act, 1961; In Short “The Act”. Heard Both The Parties At Length. Case File Perused.

For Appellant: Shri S.N. PuranikhFor Respondent: Shri Ajay Kumar Keshari

Section 115BSection 143(3)Section 2Section 263Section 69

conducted, this income could not have been unearthed. It is therefore, not a voluntary disclosure of the assessee, but had disclosed this income (i.e. unexplained investment) only after survey action. Therefore, section 69 is squarely applicable and required to taxed under provisions of section 115BBE of the Income ... relevant portion of the section 69 is read as under: “69. Unexplained investments. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee

Sahebrao Ramdas Chaudhari, Jalgaon vs. Income Tax Officer Ward 1(4) Jalgaon, Jalgaon

Appeal is partly allowed in above

ITA 487/PUN/2024[A.Y. 2015-16]Status: DisposedITAT Pune30 Aug 2024

Bench: Shri Satbeer Singh Godara & Shri Gd Padmahshali

For Appellant: -None-For Respondent: Shri Arvind Desai, Addl. CIT-DR

Section 143(3)Section 69

grounds of appeal.” 3. Learned DR vehemently argued in support ofboth the learned lower authorities action making sec.69 addition of Rs.12,41,000/- representing unexplained investment. He reiterates the point that the assessee has not been able to source thereof in both the lower proceedings and therefore, the impugned addition

Kuppusamy Baskaran, Chennai vs. ITO Non Corpo Ward 10(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 809/CHNY/2024[2017-18]Status: DisposedITAT Chennai30 Aug 2024AY 2017-18

Bench: Shri Aby T. Varkey & Shri S.R.Raghunathaआयकर अपील सं./Ita No.809/Chny/2024 िनधा"रण वष"/Assessment Year: 2017-18 V. Shri Kuppusamy Baskaran, The Ito, No.1/4, Perumal Koil Street, Non-Corporate Ward-10(1), Orakkadu Village & Post, Chennai. Sholavaram, Chennai-600 067. [Pan: Aimpb 5679 A] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Ms. Vidhya, CAFor Respondent: Mr. Hema Bhupal, JCIT

Section 143(1)Section 69

books of the assessee. Therefore, according to the assessee, question of addition made of such deposit in bank can’t in any case attract unexplained investment u/s.69 of the Act; and therefore, the addition made u/s.69 of the Act can’t be sustained. However, the Ld.CIT(A) was not convinced ... Income Tax; and by again adding the entire cash/SBNs which was sales of Rs.25,46,290/- u/s.69 of the Act alleging it as unexplained investment of the assessee is legally sustainable or not is the question before us. 8. In order to adjudicate this issue, it would be gainful

Smt. Sreenivasa Uma, Bengaluru vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Bengaluru

In the result, all the appeals of the assessee are partly allowed for statistical purposes

ITA 1225/BANG/2024[2017-18]Status: DisposedITAT Bangalore30 Aug 2024AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Ms. Sunaina Bhatia, A.RFor Respondent: Sri D.K. Mishra, D.R

Section 147Section 69Section 69ASection 69C

justified in not disposing off the grounds raised with reference to the assessment of immovable property purchased amounting to Rs.9,80,53,874/- as unexplained investment u/s. 69 of the Act under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] not justified ... cash deposits of Rs.5,33,41,000/- [Rs.5,19,00,000/- and 14,41,000/-] in the bank account of the appellant as unexplained investment u/s.69A rws 115BBE of the Act under the facts and in the circumstance of the appellant's case. 5. The learned CIT[A] not justified

Smt. Sreenivasa Uma, Bengaluru vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Bengaluru

In the result, all the appeals of the assessee are partly allowed for statistical purposes

ITA 1224/BANG/2024[2016-17]Status: DisposedITAT Bangalore30 Aug 2024AY 2016-17

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Ms. Sunaina Bhatia, A.RFor Respondent: Sri D.K. Mishra, D.R

Section 147Section 69Section 69ASection 69C

Smt. Sreenivasa Uma, Bengaluru vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Bengaluru

In the result, all the appeals of the assessee are partly allowed for statistical purposes

ITA 1223/BANG/2024[2015-16]Status: DisposedITAT Bangalore30 Aug 2024AY 2015-16

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Ms. Sunaina Bhatia, A.RFor Respondent: Sri D.K. Mishra, D.R

Section 147Section 69Section 69ASection 69C

Golden Rosaceae Realtors, Thane vs. Income Tax Officer Ward 1(1), Kalyan

In the result, the present Appeal is treated as allowed for statistical purposes

ITA 1580/MUM/2024[AY 2016-17]Status: DisposedITAT Mumbai30 Aug 2024

Bench: SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Piyush ChhajedFor Respondent: Mrs. Beena Santosh

Section 144Section 147Section 249(4)(b)Section 43C

Commissioner of Income Tax (Appeals) erred in not going into the merits of the case and confirmed the addition of Rs.1,80,00,000/- Unexplained Investment, without appreciating that only Rs. 45,00,000/- had been paid balance was withheld due to the matter pending before the civil court ... order, the income of the Appellant was assessed by INR 2,56,00,000/- after making addition of INR 1,80,00,000/- as unexplained investment and addition of INR 76,00,000/- as income under Section 43CA of the Act. 4. Being aggrieved, the Appellant preferred appeal before

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2938/DEL/2023[2017-18]Status: DisposedITAT Delhi30 Aug 2024AY 2017-18

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2937/DEL/2023[2016-17]Status: DisposedITAT Delhi30 Aug 2024AY 2016-17

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2936/DEL/2023[2015-16]Status: DisposedITAT Delhi30 Aug 2024AY 2015-16

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV

Anil Chaudhary, New Delhi vs. ACIT Central Circle-17, New Delhi

In the result, appeals filed by the assessee are allowed

ITA 2935/DEL/2023[2014-15]Status: DisposedITAT Delhi30 Aug 2024AY 2014-15

Bench: Shri S.Rifaur Rahman & Shri Anubhav Sharma

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Amisha Gupt, CIT DR

Section 127Section 143(2)Section 153ASection 153CSection 153DSection 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV

Parag Dalmia, New Delhi vs. DCIT, Central Circle-26, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1871/DEL/2023[2006-07]Status: DisposedITAT Delhi30 Aug 2024AY 2006-07

Bench: Shri Pradip Kumar Kedia & Shri Sudhir Kumar

For Respondent: Shri P.N. Barnwal, CIT-DR

Section 132(4)Section 143(3)Section 153ASection 271(1)(c)

assessment proceedings or appellate proceedings. 2. The Ld. CIT(A) has erred in deleting the addition of Rs.41,08,342/- on account of unexplained investment in jewellery found during search and seizure action without appreciating the fact that the assessee has not submitted any documentary evidence in support ... matter, Ground No.1 of the Revenue’s Appeal is dismissed. 29. Ground No.2 concerns additions of Rs.41,08,342/- on account of unexplained investment in jewellery found during the search. The CIT(A) while granting the relief on the issue has observed as under: “7.3 The AR of the appellant