“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

ITO 3(3)(3), Mumbai vs. Art Deco Mumbai Private Limited, Mumbai

In the result the appeal of the learned Assessing Officer for A

ITA 4757/MUM/2023[2016-17]Status: DisposedITAT Mumbai22 Jul 2024AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Anikesh Banerjee, Jm

For Appellant: Shri Satyaprakash Singh, ARFor Respondent: Shri Manoj Kumar Sinha, DR

Section 143(2)Section 144BSection 147Section 148Section 69A

held that section 69 and section 69A, apart from being close neighbours, have resemblance with one another. Section 69 deals with unexplained investment and section 69A deals with unexplained money, bullion, jewellery or other valuable article. In the case of investments under section 69, the law giver contemplates the Assessing

DCIT Central, Bhopal vs. Sharad Sharma, Bhopal

ITA 309/IND/2023[2012-13]Status: DisposedITAT Indore19 Jul 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniit(Ss)A No. 29/Ind/2023 (Ay: 2010-11) It(Ss)A No. 32/Ind/2023 (Ay: 2015-16) Shri Sharad Sharma, Acit, Central, बनाम/ H-3B, Nishant Colony, Gwalior Vs. 74 Bunglows, (Stationed At Bhopal) Tt Nagar, Bhopal (Pan: Amzps9791D) (Assessee/Appellant) (Revenue/Respondent)

Section 132Section 132(4)Section 143(3)Section 153A

case and in law, the Ld. CIT(A) erred in confirming the addition made by the Ld. A.O. of Rs. 10,00,000/- as unexplained investment of the appellant. 2. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition made ... grounds raise a single issue of addition of Rs. 10,00,000/- made by AO and upheld by CIT(A) on account of unexplained investment. 16. The AO has made this addition in Para 18 of assessment-order on the basis of “LPS-SS-1-Page-4” seized during search

DCIT Central, Bhopal vs. Sharad Sharma, Bhopal

ITA 304/IND/2023[2015-16]Status: DisposedITAT Indore19 Jul 2024AY 2015-16

Section 132Section 132(4)Section 143(3)Section 153A

Madhemangalam Primary Agriculatural Co Op Society, Dharmapuri vs. ITO, Ward-1, Dharmapuri

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

ITA 84/CHNY/2024[2017-18]Status: DisposedITAT Chennai19 Jul 2024AY 2017-18

Bench: Shri Mahavir Singh & Shri Jagadishआयकर अपील सं./Ita No.84/Chny/2024 िनधा8रण वष8 /Assessment Year: 2017-18

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri P.Sajit Kumar, JCIT

Section 142(1)Section 144Section 69ASection 80A(5)Section 80PSection 80P(2)Section 8O

record before the lower authorities and hence there was no basis to confirm a portion of the amount deposited in the bank account as unexplained investment of assesse. 10. The NFAC, in any view of the matter, ought to have afforded adequate opportunity to the assessee and granted the benefit

Sudha Babu Ranjitha, Bangalore vs. Income Tax Officer, Ward-3(2)(1), Bangalore

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

ITA 1074/BANG/2024[2017-18]Status: DisposedITAT Bangalore19 Jul 2024AY 2017-18

Bench: Shri Laxmi Prasad Sahu & Shri Prakash Chand Yadavassessment Year : 2017-18

For Appellant: Shri Abhishek R., CAFor Respondent: Shri Ganesh R. Ghale, Standing Counsel

Section 142(1)Section 69A

Syndicate Bank account and as per the AO the assessee was unable to offer any explanation with documentary evidences. Accordingly it was treated as unexplained investment u/s. 69A of the Act and assessment was completed. Aggrieved by the above order, the assessee filed appeal before the First Appellate Authority

Divya Bhalchandra Patel, Ahmedabad vs. The ITO, Ward-3(3)(1), Ahmedabad

ITA 714/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad18 Jul 2024AY 2014-15

Bench: Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad , Has Arisen From The Appellate Order Dated 12/07/2023 Passed By Ld. Commissioner Of Income-Tax(Appeals), Nfac, New Delhi U/S. 250 Of The Income-Tax Act, 1961 Vide Din & Order No. Itba/Nfac/S/250/2023-24/1054298633(1), Which In Turn Has Arisen From The Assessment Order Dated 13-10-2017 Passed By Ld. Assessing Officer U/S. 147 R.W.S 143(3) Of The 1961 Act.

For Appellant: Shri Vivek Chavda, ARFor Respondent: Smt. Trupti Patel, Sr. D.R. & Shri

Section 142(1)Section 147Section 148Section 250Section 69

grievously erred in law and or on facts in upholding the addition of Rs.27,00,000/- u/s 69 as unexplained investment. 3.2 That the Ld. CIT(A) ought not to have upheld addition of Rs.27,00,000 as unexplained investment u/s 69. 4.1 The Ld. CIT(A) has grievously erred ... assessee as to why the addition should not be made u/s. 69 of the Act to the tune of Rs.27,00,000/- as unexplained investment made by the assessee towards purchase of immovable property (shop) and making payment in cash to seller. The assessee did not reply to the said

The DCIT Central-1, Indore vs. Shri Ashish Nigam, Indore

In the result, appeal of the Revenue is dismissed

ITA 31/IND/2023[2017-18]Status: DisposedITAT Indore18 Jul 2024AY 2017-18

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanidcit Central-1 Ashish Nigam Indore 15, Bada Sarafa Vs. Indore (Appellant / Revenue) (Respondent/ Assessee) Pan: Ablpn6361M Revenue By Shri Ashish Porwal, Sr. Dr Assessee By Ms. Shreya Jain, Ar Date Of Hearing 04.06.2024 Date Of Pronouncement 18.07.2024

Section 132Section 44ASection 69

addition of Rs. 86,50,000/- made by the AO u/s 69 r.w.s. 115BBE of the Income Tax Act, 1961 on account of unexplained investment ITANo.31/Ind/2023 Shri Ashish Nigam in the form of cash Rs. 86,50,000/- deposited in his bank account on 11.11.2016. 2. Whether on the facts ... with requisite supporting evidences. The assessee was also apprised that in case of failure to do so the said cash shall be treated as unexplained investment u/s 69 r.w.s 1156BE of the Act.” 6.1 The assesse filed it reply vide letter dated 20.11.2019 and explained the source of deposit

Ramanan Ranganath, Chennai vs. Dy Comm of Income Tax, Cir-42(3)(1), Mumbai

Appeal is allowed for statistical purposes in above terms

ITA 1795/MUM/2024[2012-13]Status: DisposedITAT Mumbai18 Jul 2024AY 2012-13

Bench: Shri Satbeer Singh Godara & Shri Girish Agrawal

For Appellant: Shri Sanjay ParikhFor Respondent: Smt. Mahita Nair, Sr. DR

Section 139(1)Section 147Section 69C

learned representatives reiterated their respective stands against and in support of the impugned disallowance amounting to Rs.26 lakhs u/sec.69C of the Act representing alleged unexplained investment as upheld in the learned CIT(A)-NFAC’s order. 4. We note in this factual backdrop at the outset that the Assessing Officer ... fact added assessee’s alleged unexplained investment of Rs.1,73,00,000/- which stands upheld only to the etent of Rs.26 lakhs in the CIT(A)-NFAC’s lower appellate discussion. Learned DR vehemently contended that the CIT(A)- NFAC’s herein has already granted substantial relief to the assessee

Nand Krishna Kumar Goswami, Ahmedabad vs. The Income Tax Officer, Ward-5(2)(5), Ahmedabad

In the result, the appeal of the assessee in ITA No

ITA 518/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad16 Jul 2024AY 2017-18

Bench: The Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad Has Arisen From The Appellate Order Dated 31-01-2024 In Din & Order No.

For Appellant: None(Adjournment Application filed)For Respondent: Shri Sanjay Jain, Sr. D.R

Section 139Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 250Section 69A

erred in confirming addition to the extent of cash deposited in bank account which was cash on hand of Rs. 13,50,000/- as unexplained investment u/s 69A of the Act 3 In law and in the facts and circumstances of the appellant's case, the honourable Commissioner of Income ... being made by the AO to the income of the assessee on account of cash deposits in the bank during demonetization period being unexplained investment u/s. 69A of the Act. 4. Aggrieved, the assessee filed first appeal with ld. CIT(A) who dismissed the appeal of the assessee ex-parte

Ilabahen Viralkumar Mehta, Ahmedabad vs. The Income Tax Officer, Ward-3, Anand

In the result, the appeal of the assessee in ITA No

ITA 17/AHD/2024[2012-13]Status: DisposedITAT Ahmedabad16 Jul 2024AY 2012-13

Bench: Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad Has Arisen From The

For Appellant: Ms. Kinjal V. Shah, A.RFor Respondent: Shri Sanjay Jain, Sr. D.R

Section 143(2)Section 143(3)Section 147Section 148Section 151Section 250

shares of Hemo Organics Limited , which stood added by the AO to the income of the assessee as unexplained investment. I have observed that the ld. CIT(A) dismissed the first appeal filed by the assessee ex-parte in limine without deciding the issue arising in the appeal on merits

The ACIT, Mehsana Circle, Mehsana vs. Shri Umesh Vadilal Khamar, Mehsana

In the result, the appeal of the Revenue is dismissed

ITA 1136/AHD/2019[2014-15]Status: DisposedITAT Ahmedabad16 Jul 2024AY 2014-15

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar

For Appellant: Shri Bharat Trivedi, ARFor Respondent: Shri Prathvi Raj Meena, CIT-DR

Section 131Section 131(3)Section 133ASection 143(2)Section 143(3)

made on the basis of jottings made in the diary which was impounded and another addition of Rs.26,60,000/- on account of unexplained investment in house property. Vide appellate order dated 17.12.2018, the addition of Rs.51,60,000/- was confirmed whereas the addition of Rs.26,60,000/- was deleted

Veena Sharma, Jaipur vs. Income Tax Officer, Jaipur

In the result, the appeal filed by the assessee in ITA No

ITA 376/JPR/2024[2013-2014]Status: DisposedITAT Jaipur16 Jul 2024AY 2013-2014

Bench: SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Sh. Saurav Harsh, AdvFor Respondent: Sh. Anoop Singh, Addl. CIT (V.C)

Section 147Section 148Section 69C

facts and circumstances of the case the Id. Assessing Officer grossly erred in making addition of Rs 60,00,000/- u/s 69C as unexplained investment which was never made by the assessee appellant 4. The appellant craves leave to add, alter, modify or amend any ground on or before ... completed u/s 144 as ex-parte case under the I.T. Act 1961. Considering the facts of the case, Rs.60,00,000/- was treated as unexplained investment u/s 69 of the I.T. Act 1961 and was added to the total income of the assessee. 9. Aggrieved by the order

Veena Sharma, Jaipur vs. Income Tax Officer Ward 7(3), Jaipur

In the result, the appeal filed by the assessee in ITA No

ITA 375/JPR/2024[2011-2012]Status: DisposedITAT Jaipur16 Jul 2024AY 2011-2012

Bench: the Hon'ble Income-tax Appellate Tribunal for the following reason: 3

For Appellant: Sh. Saurav Harsh, AdvFor Respondent: Sh. Anoop Singh, Addl. CIT (V.C)

Section 147Section 148Section 69C

DCIT, Central Circle-3, Vadodara vs. M/S. Tash Investment Pvt. Ltd, Vadodara

The appeal of the Revenue is partly allowed

ITA 821/AHD/2018[2015-16]Status: DisposedITAT Ahmedabad15 Jul 2024AY 2015-16

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarआयकर अपील सं / Ita No. 821/Ahd/2018 िनधा"रण वष"/Assessment Year : 2015-16 बनाम बनाम बनाम बनाम Deputy Commissioner Of M/S. Tash Investment Pvt. Ltd., Income-Tax, 9Th Floor, Abs Tower, Vs. Central Circle-3, Old Padra Road, Vadodara Vadodara, Gujarat Pan: Aaact 6737 A अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) िनधा"रती की ओर से / Assessee By : Shri Milin Mehta, Ar ""थ" की ओर से / Revenue By: Shri Pratik Sharma, Sr Dr सुनवाई की तारीख /Date Of Hearing : 25/04/2024 घोषणा की तारीख /Date Of Pronouncement: 15/07/2024 आदेश/O R D E R Per Annapurna Guptapresent Appeal Has Been Filed By The Revenue Against The Order Of The Learned Commissioner Of Income-Tax (Appeals)-12, Ahmedabad [Hereinafter Referred To As "Cit(A)" For Short] Dated 18.01.2018 Passed Under Section 250 Of The Income-Tax Act, 1961 [Hereinafter Referred To As "The Act" For Short], For The Assessment Year (Ay) 2015-16. 2. Grounds Raised Are As Under:- “1. On The Facts & Circumstances Of The Case & In Law, The Ld. Cit(A) Has Erred In Deleting The Addition Of Rs. 1,23,80,013/- (Rs.31,24,113/- Found From Locker No. 1483 Of Bank Of Baroda + Rs. 92,55,900/- Found From Locker No.430 Of Royal Bank Of Scotland) Made On Account Of Unexplained Jewellery Without Considering The Fact That The Assessee Could Not Explain The Source Of Investment & Also Could Not Submit The Documentary Evidences Regarding The Source Of Jewellery Like Purchase Bills, Vouchers Etc. Dcit Vs. Tash Investment Pvt Ltd Ay : 2015-16 2

For Appellant: Shri Milin Mehta, ARFor Respondent: Shri Pratik Sharma, Sr DR

Section 132Section 143(3)Section 250

against which the Revenue has come up in appeal before us. The two additions relate to the following:- (i) unexplained investment in jewellery of Rs.1,23,80,013/- (ii) re-characterizing the income earned by the assesse from dealing in shares as business income as opposed to long term ... heavily relied upon the order of the Assessing Officer. 7. In view of the admitted fact that the issue of addition on account of unexplained investment in jewellery stands covered in favour of the assessee by the order of the ITAT in the connected group cases

Nisha Thomas, Mumbai vs. Commissioner of Income Tax (A)-Drp-2, Mumbai

In the result, the appeal is allowed

ITA 2764/MUM/2024[2015-16]Status: DisposedITAT Mumbai15 Jul 2024AY 2015-16

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Gunjan Kakkad, CAFor Respondent: Shri Himanshu Sharma, CIT-DR

Section 142(1)Section 147Section 148Section 148A

further details, the AO proceeded to treat the difference amount of Rs. 25,00,000/- (Rs. 60,10,000 – Rs. 35,10,000) as unexplained investment and made addition accordingly. 3. The assessee filed its objections before the DRP against the draft assessment order passed by the AO. Before

Anil Firojiya, Bhakt Nagar, Ujjain vs. Dy Commisioner of Income Tax, Ujjain

Appeal is allowed for statistical purpose

ITA 416/IND/2023[2015-16]Status: DisposedITAT Indore12 Jul 2024AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2015-16 Shri Anil Firojiya, Dy. Commissioner Of 6, Bhakt Nagar, Income-Tax, बनाम/ Dashera Maidan, Assessment Unit, Vs. Ujjain New Delhi (Assessee/Appellant) (Revenue/Respondent) Pan: Aaipf7302A Assessee By Shri Manoj Fadnis, Ca Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 04.07.2024 Date Of Pronouncement 12.07.2024

Section 139Section 143(3)Section 147Section 148Section 151Section 271(1)(c)Section 69

completed re-opened assessment vide order dated 26.03.2022 after making an addition of Rs. 16,59,500/- on account of unexplained investment in purchase of properties. Aggrieved by such order, the assessee carried matter in first-appeal before CIT(A) but did not get any relief. Still aggrieved, the assessee ... purchase of both the properties. Accordingly, the amount of Rs. 16,59,500/- paid in cash for purchase of property is treated as unexplained investments of the assessee and added to the income of the assessee u/s 69 r.w.s. 115BBE of the Income-tax Act, 1961. Penalty proceedings

Anil Firojiya, Bhakt Nagar Ujjain vs. Dy Commisioner of Income Tax, Aaykar Bhawan

Appeal is allowed for statistical purpose

ITA 413/IND/2023[2018-19]Status: DisposedITAT Indore12 Jul 2024AY 2018-19

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2018-19 Shri Anil Firojiya, Dy. Commissioner Of 6, Bhakt Nagar, Income-Tax, बनाम/ Dashera Maidan, Assessment Unit, Vs. Ujjain New Delhi (Assessee/Appellant) (Revenue/Respondent) Pan: Aaipf7302A Assessee By Shri Manoj Fadnis, Ca Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 04.07.2024 Date Of Pronouncement 12.07.2024

Section 115BSection 139Section 142(1)Section 143(3)Section 147Section 148Section 69

completed re-opened assessment vide order dated 17.02.2023 after making an addition of Rs. 10,29,672/- on account of unexplained investment in construction of property. Aggrieved by such order, the assessee carried matter in first-appeal before CIT(A) but did not get any relief. Still aggrieved, the assessee ... made. In this regard, you are requested to explain as to why the amount of Rs. 10,29,672/- should not be treated as unexplained investment and added to the total income. 1. Synopsis of the reply of the assessee to SCN and additional SCN (if any): Assessee has neither

Avinash Alok Jajodia, Mumbai vs. Dy. Commissioner of Income Tax, Central Circle - 8(4), Mumbai

In the result the appealis DISMISSED

ITA 198/MUM/2024[2018-2019]Status: DisposedITAT Mumbai12 Jul 2024AY 2018-2019

Bench: Shri Prashant Maharshi & Shri Anikesh Banerjee

For Appellant: Shri Atul MehtaFor Respondent: Shri Manoj Kumar Sinha (CIT DR)

Section 115BSection 132(1)Section 143(3)Section 250Section 69B

during the course of the Search Proceedings. 3.01 The learned CIT(A) has erred in confirming the addition of Rs. 25,05,836 as unexplained investment u/s 69B read with section 115BBE of the Act without considering the facts that some of the jewellery belonged to one of the group

Sidharth Satpal Saigal, Mumbai vs. Income Tax Officer. 28(3)(1), Mumbai

Appeal is allowed for statistical purposes in above terms

ITA 1749/MUM/2024[2015-16]Status: DisposedITAT Mumbai11 Jul 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: -None-For Respondent: Shri B. Laxmi Kanth, Sr. AR

Section 147Section 249(4)(b)Section 69

payment ofadvanc tax whereby invoking sec. 249(4)(b) of the Act. He appears to have uphold the Assessing Officer’s action making sec.69 unexplained investment addition of Rs.1,28,00,000/- in otherwords for the foregoing sole reason. 3. The Revenue could hardly dispute during the course of hearing

Income-Tax Officer, Mumbai vs. Ankit Umakant Agarwal, Mumbai

In the result, the appeal of the revenue bearing ITA No

ITA 4462/MUM/2023[2011-12]Status: DisposedITAT Mumbai11 Jul 2024AY 2011-12

Bench: Shri Prashant Maharshi & Shri Anikesh Banerjee

Section 143(3)Section 148Section 250Section 69

accepted the assessee's plea and added back the entire amount of Rs.3 crores with the total income of the assessee as unexplained investment under section 69 of the Act. Bing aggrieved the assessee filed an appeal before the Id. CIT(A). The Ld.CIT(A) has considered the submission ... erred in deleting the addition made u/s 69 and thereby failed to appreciatethat addition u/s 69 beingthat of unexplained investment can 6e appropriately made in the hand of the assesses who is legal owner of such investment even though on money was paid by his father. 4. The appellant craves