“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

Mangeshi Enterprises, Kalyan vs. Assistant Commissioner of Income Tax Central Circle-2, Thane

ITA 4492/MUM/2023[2014-2015]Status: DisposedITAT Mumbai27 Aug 2024AY 2014-2015

Bench: Shri Girish Agrawal & Shri Sunil Kumar Singh

Section 132Section 143(3)Section 153ASection 153DSection 68

After considering the submissions made by the assessee, ld. Assessing Officer proceeded to make addition of Rs. 1.5 Crores by treating it as unexplained investment u/s.69 of the Act representing assessee's cash investment out of unexplained sources of income not recorded in his book of accounts. It is important

Kalyan Development Corporation, Kalyan vs. Assistant Commissioner of Income Tax Central Circle-2 Thane, Thane

ITA 4490/MUM/2023[2016-17]Status: DisposedITAT Mumbai27 Aug 2024AY 2016-17

Bench: Shri Girish Agrawal & Shri Sunil Kumar Singh

Section 132Section 143(3)Section 153ASection 153DSection 68

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH

Jisna John, Kallur vs. Income Tax Officer, New Delhi

Appeal of the assessee is allowed for statistical purposes

ITA 899/DEL/2024[2012-13]Status: DisposedITAT Delhi27 Aug 2024AY 2012-13

Bench: Shri Kul Bharatassessment Year: 2012-13

Section 144Section 147Section 249(4)Section 249(4)(b)Section 250Section 68Section 69A

received cash assistance from parents which was mobilized in her bank account to meet expenses of foreign travel to Australia, hence no element of unexplained investment u/s 69 of the Act was involved. Learned counsel also submitted that no notices as referred in order passed

Shakuntala, Ghaziabad vs. ITO Ward - 2(3), Ghaziabad

In the result, the appeal of the assessee is allowed

ITA 9088/DEL/2019[2011-12]Status: DisposedITAT Delhi27 Aug 2024AY 2011-12

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2011-12

For Appellant: Shri Rohit Tiwari, Ms Tanya &For Respondent: Shri Anuj Garg, Sr. DR

Section 142(1)Section 147Section 148Section 46ASection 69

case and in law, on facts and in surrounding circumstances in making huge impugned addition of Rs. 70,30,040 towards so called unexplained investment u/s 69 of I.T. Act in an arbitrary and cursory manner on the basis of assumption and presumption. 3. That

Nirvin Cold Storage Pvt. Ltd., Kolkata vs. ITO, Ward-6(1), Kolkata

ITA 557/KOL/2024[2016-17]Status: DisposedITAT Kolkata26 Aug 2024AY 2016-17

Bench: Shri Sanjay Garg & Rajesh Kumari.T.A No.557/Kol/2024 Assessment Year: 2016-17 Nirvin Cold Storage Pvt. Ltd….………………… ........................……Appellant 1St Floor Suit No.5, Onkara Chambers, 30 Bentick Street, Near Lal Bazar, Kolkata -1. [Pan: Aabcn1213E] Vs. Ito, Ward-6(1), Kolkata.................…................…........……...…..…..Respondent Appearances By: Shri Akkal Dudhewala, Ar, Appeared On Behalf Of The Appellant. Shri P. P. Barman, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : June 10, 2024 Date Of Pronouncing The Order : August 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 18.12.2023 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. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. For That On The Facts & In Circumstances Of The Case, The Ld. Cit(A), Nfac Erred In Disposing Of The Appeal On Merits Ex-Parte Without Affording Sufficient Opportunity Of Being Heard. 2. (A) For That On The Facts & In Circumstances Of The Case, The Ld. Cit(A), Nfac Erred In Confirming The A0'S Action Of Making Addition Of

Section 10(1)Section 145(3)Section 250

were already forming part of the books of accounts and therefore the same could not have been legally added by way of unexplained investments in the hands of the appellant. (a) For that on the facts and in circumstances of the case, the Ld. CIT(A), NFAC erred in confirming

Niraj Kirti Doshi, Mumbai vs. PCIT, Mumbai

In the result, the appeal by the assessee is dismissed

ITA 1567/MUM/2024[2018-19]Status: DisposedITAT Mumbai26 Aug 2024AY 2018-19

Bench: Ms Padmavathy S, Am & Shri Sunil Kumar Singh, Jm

For Appellant: Shri Kirit S. Sanghvi, ARFor Respondent: Shri S Srinivasu, CIT-DR

Section 115BSection 263Section 69B

that since the assessee has accepted the said income towards unexplained stock of loose diamonds the income should be added under section 69B as unexplained investments and to be taxed under section 115BBE. The PCIT accordingly issued a show-cause notice under section 263 of the Act. The assessee submitted ... during the course of survey which was part of the business income. The assessee further submitted that the loose diamonds cannot be treated as unexplained investments since the same are part of stock of the Jewelry business. The assessee also submitted that the income has been offered as part

Shreenath Developers, Vadodara vs. The Income Tax Officer, Ward-3(1)(5), Vadodara

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

ITA 909/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad23 Aug 2024AY 2017-18

Bench: Shri Ramit Kochar & Shri Siddhartha Nautiyal

For Appellant: Shri Prashant Upadhyay, A.RFor Respondent: Shri Ashok Kumar Suthar, Sr. DR

Section 68Section 69A

Shreenath Developers vs. ITO Asst.Year –2017-18 - 2– 4. The learned CIT (Appeals) upheld the addition made amounting to Rs. 68,00,000/- as unexplained investment without considering the fact that the part of the amount paid towards the investment in subsequent year/s. 5. Your Appellant craves the right ... paid to the seller was not found in the bank statement. Accordingly, the Assessing Officer added a sum of Rs. 68,00,000/- as unexplained investment under Section 69 of the Act in the hands of the assessee on the ground that the payments were not paid by the assessee

Ravi Kumar Enantala, Vijayawada vs. Income Tax Officer Ward 2(4), Vijayawada

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

ITA 168/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam23 Aug 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Bleआयकर अपील सं./ I.T.A. No.168/Viz/2024 (िनधा"रण वष" / Assessment Year : 2017-18) Ravikumar Enantala, Vs. Income Tax Officer, D.No. 74-1-22/1, Ward-2(4), Yrl Complex, Mg Road, Vijayawada. Patamata, Vijayawada, Andhra Pradesh – 520007. Pan: Aadpe9027C (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ" क" ओर से/ Appellant By : Sri C. Subrahmanyam, Ar ""याथ" क" ओर से / Respondent By : Dr. Aparna Villuri, Sr. Ar सुनवाई क" तारीख / Date Of Hearing : 14/08/2024 घोषणा क" तारीख/Date Of : 23/08/2024 Pronouncement O R D E R

For Appellant: Sri C. Subrahmanyam, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 115BSection 133(6)Section 142(1)Section 142(1)(i)Section 144Section 271ASection 69A

sources to the extent of Rs. 13,35,249/- only and therefore the balance amount of Rs. 20,09,251/- was treated as unexplained investment U/s. 69A of the Act and taxed U/s. 115BBE of the Act. The Ld. AO also initiated the penalty proceedings U/s. 271AAC

Rishra St. Thomas Academy, Hooghly vs. A.O. Ward 23(1), Hooghly

In the result, appeal of the assessee is allowed

ITA 670/KOL/2024[2017-18]Status: DisposedITAT Kolkata23 Aug 2024AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishraassessment Year: 2017-18

For Appellant: Girdhar Dhelia, ARFor Respondent: Archana Gupta, Addl. CIT-DR

Section 142(1)Section 144Section 250Section 50Section 69

making an arbitrary addition of Rs. 13,10,500/- which was deposited in the disclosed Bank Account during the F.Y. 2016-17 as unexplained investment u/s 69.” 3. Brief facts of the case are that the assessee is an AOP registered as an educational institution recognized by West Bengal Board ... held as under: “6.6 This grounds are regards to additions of Rs. 13,10,500/- being cash deposits which was treated as unexplained investment u/s 69 of the IT Act, 1961. 6.7 During the course of the assessment proceedings, it was noted by the AO that the appellant has deposited

Valliappan Lakshmanan, Chennai vs. ITO, Ncw 19(6), Chennai

In the result, appeal filed by the assessee is allowed

ITA 619/CHNY/2024[2017-18]Status: DisposedITAT Chennai23 Aug 2024AY 2017-18

Bench: Hon’Ble Shri Manu Kumar Giri & Hon’Ble Shri Amitabh Shuklaआयकरअपील सं./ Ita No.619/Chny/2024 (िनधा"रणवष" / Assessment Year: 2017-2018) Valliappan Lakshmanan, Vs. The Income Tax Officer, No.51, Cart Track Road, Non Corporate Ward 19(6) Maduvankarai, Chennai. Guindy, Chennai 600 032. [Pan: Aadpv 6468N] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Shri S.P. Chidambaram, Advocate ""यथ" क" ओर से /Respondent By : Ms. Gouthami Manivasagam, Irs, Jcit

For Appellant: Shri S.P. Chidambaram, AdvocateFor Respondent: Ms. Gouthami Manivasagam, IRS, JCIT

Section 69

cash gift (duly evidenced by gift deed) from Appellant's father Mr Ar.Lakshmanan and as such the said funds cannot be considered as unexplained investment. 4. The CIT(A) failed to appreciate that there is no legal mandate to register cash gift deed and as such the gift deed cannot

Shree Samarth Constructions, Mumbai vs. National Faceless Assessment Centre, Deslhi

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

ITA 3369/MUM/2024[2016-2017]Status: DisposedITAT Mumbai23 Aug 2024AY 2016-2017

Bench: Ms. Kavitha Rajagopal, Jm & Shri Girish Agrawal, Am Shree Samarth Constructions National Faceless Assessment Centre Room No. 7, Indira Nagar Kishan, North Block, Delhi-110 001 No.2 Opp. Balasara Co. Wagle Estate, Vs. Thane (W), Thane-400 604

For Appellant: Dr. K. Shivaram - Sr. Adv. &For Respondent: Shri Shambhu Yadav

Section 147Section 148Section 250Section 69

parte order may be set aside. Without prejudice to the above, • Addition of Rs.2,81,63,000/- made u/s. 69 as an unexplained investment for the purchase of Immovable Property. • The National Faceless Appeal Centre (NFAC) erred in confirming the addition of Rs.2,81,63,000/- u/s.69 as unexplained investment ... Shree Samarth Constructions vs. NFAC the total income at Rs.3,61,92,000/- after making the impugned additions u/s. 69 of the Act as ‘unexplained investment’. 5. Aggrieved by the said order, the assessee was in appeal before the first appellate authority who vide order dated 14.02.2024, upheld the addition

Ramesh Jasubhai Patel, Ghatlodia, Ahmedabad vs. Income Tax Officer, Pratyaksha Kar Bhavan, Ambawadi

ITA 438/AHD/2024[2015-16]Status: DisposedITAT Ahmedabad22 Aug 2024AY 2015-16

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं / Ita Nos. 436 To 438/Ahd/2024 िनधा%रण वष%/Assessment Year: 2012-13, 2013-14 & 2015-16 बनाम Ramesh Jasubhai Patel, Income Tax Officer, Vs. A/7, Satkar Bungalow, Ward 4(2)(3), Ghatlodia, Ahmedabad Ahmedabad Gujarat-380061 Pan : Akspp 7877 N अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) िनधा%(रती की ओर से / Assessee By : Shri Prakash D. Shah, Ar *+थ- की ओर से / Revenue By : Smt. Trupti Patel, Sr Dr सुनवाई की तारीख/Date Of Hearing : 20.08.2024 घोषणा की तारीख /Date Of Pronouncement: 22.08.2024

For Appellant: Shri Prakash D. Shah, ARFor Respondent: Smt. Trupti Patel, Sr DR

Section 142(1)Section 144Section 147Section 148Section 249(2)Section 250

Unexplained cash HDFC Bank purchase of flat at deposit with HDFC (Rs.90,60,000) Satellite Bank (Rs.79,87,500) - Unexplained (Rs.6,76,000) - Unexplained investment in - Unexplained investment in immovable investment in flat immovable property at Bavla at Satellite property (Rs.67,60,000) (Rs.33,56,800) (Rs.36,71,500) Date ... making an addition for the 10,00,000 7,00,000 32,51,000 purchase of property as (Mount (Land) (Property) unexplained investment under Abu) 3 Section 69 of the Income Tax Act, and the said addition should be deleted while computing the total income. The AO erred

Ramesh Jasubhai Patel, Ghatlodia, Ahmedabad vs. Income Tax Officer, Pratyaksha Kar Bhavan, Ambawadi

ITA 437/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad22 Aug 2024AY 2013-14

For Appellant: Shri Prakash D. Shah, ARFor Respondent: Smt. Trupti Patel, Sr DR

Section 142(1)Section 144Section 147Section 148Section 249(2)Section 250

Ramesh Jasubhai Patel, Ghatlodia, Ahmedabad vs. Income Tax Officer, Pratyaksha Kar Bhavan Ambawadi

ITA 436/AHD/2024[2012-13]Status: DisposedITAT Ahmedabad22 Aug 2024AY 2012-13

For Appellant: Shri Prakash D. Shah, ARFor Respondent: Smt. Trupti Patel, Sr DR

Section 142(1)Section 144Section 147Section 148Section 249(2)Section 250

Tej Organisers Pvt.Ltd., Ahmedabad vs. Income Tax Officer, Ward-4(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 50/AHD/2022[2012-13]Status: DisposedITAT Ahmedabad22 Aug 2024AY 2012-13

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Biren Shah & Shri Gulab Thakor, A.RsFor Respondent: Shri Ashok Kumar Suthar, Sr. DR

Section 143(1)Section 143(3)Section 147Section 148Section 271(1)(c)Section 274

erred in upholding addition of Rs. 2,85,00,000/- in respect of advances given to Shri Kanaiyo Thakkar treating it as unexplained investments when such investments is already reflected in Audited Annual Accounts. 7. In law and in the facts and circumstances of the appellant's case, the reassessment ... evidence. Due to the lack of evidence and explanation, a sum of Rs. 2,85,00,000/- was added to the total income as unexplained investment. Penalty proceedings under section 274 read with section 271(1)(c) were initiated separately for concealment of income. 4. In appeal, Ld. CIT(Appeals

Incometax Officer, Ward-, Kottayam vs. Puthenkudy Paulose Babu, Kottayam

The appeal is allowed

ITA 775/COCH/2023[2017-18]Status: DisposedITAT Cochin22 Aug 2024AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: -None-For Respondent: Smt. V. Swarnalatha, Sr. DR

Section 144Section 251(1)(a)Section 68Section 69Section 69A

appellant has taken the plea that the conditions specified in section 69 of the Act for considering the deposit of Rs.68,00,000/- as unexplained investment has not been established by the Assessing Officer. The investment does not satisfy any of the conditions specified in section ... deposits in the bank account, however, in the conclusion the AO made the addition of Rs.68,00,000/- u/s 69 of the Act as unexplained investment. The provisions of section 69 clearly deals with unexplained investment whereas section 69A deals with unexplained money. Thus, the AO failed to apply

Mrs. Jatinder Kaur Bhatia, Khandwa vs. ACIT- (Central) Ujjain, Ujjain

Appeals are dismissed and assessee’s

ITA 227/IND/2023[2018-19]Status: DisposedITAT Indore22 Aug 2024AY 2018-19

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 132Section 153ASection 40A(3)Section 69

case and in law, the Ld. CIT(A) was justified in deleting the mad addition of Rs. 4,05,973/- made for unexplained investment u/s 69 of the IT Act in construction of house? 4. Whether on the facts and the circumstances of the case ... justified in deleting the addition of Rs. 4,05,973/- made for unexplained investment u/s 69 of the IT Act in construction of house without pointing out any specific defect in the report of the Departmental Valuation Officer? 5. Whether on the facts and the circumstances of the case

DCIT- (Central)-3, Indore vs. Mrs. Jatinder Kaur Bhatia, Khandwa

Appeals are dismissed and assessee’s

ITA 207/IND/2023[2016-17]Status: DisposedITAT Indore22 Aug 2024AY 2016-17

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 132Section 153ASection 40A(3)Section 69

DCIT- (Central)-3, Indore vs. Mrs. Jatinder Kaur Bhatia, Khandwa

Appeals are dismissed and assessee’s

ITA 206/IND/2023[2015-16]Status: DisposedITAT Indore22 Aug 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 132Section 153ASection 40A(3)Section 69

Jatin Maganlal Shah, Mumbai vs. Incomet Tax Officer 41(2)(2), Mumbai

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

ITA 1685/MUM/2024[2015-16]Status: DisposedITAT Mumbai22 Aug 2024AY 2015-16

Bench: Ms. Kavitha Rajagopal, Jm & Shri Gagan Goyal, Am Jatin Manganlal Shah Income Tax Officer 41(2)(2) 1501 Tower 3 Ramona Runwal Kautilya Bhavan, Bkc, Anthrium, Lbs Marg, Mulund (W), Vs. Bandra, Mumbai-400 051 Mumbai-400 080

For Respondent: Ms. Rajeshwari Menon

Section 143(2)Section 143(3)Section 250

grossly erred in confirming the action of the A.O. of addition of Rs.42,00,000/- as unexplained investment. 2 Jatin Manganlal Shah vs. ITO 3. On the facts and circumstances of the case and in law, the ld. CIT(A) has grossly erred in confirming the action ... determining the total income at Rs.77,39,856/-, after making an addition of Rs.42 lacs on account of unexplained investments in immovable property and Rs.27 lacs on account of unexplained loan credits. 5. The assessee was in appeal before the first appellate authority, challenging the assessment order