“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

Mahavir Kumar Jain, Ujjain vs. I.T.O. 1(1), Ujjain

In the result, All appeals of the assessee are partly allowed

ITA 420/IND/2023[2010-11]Status: DisposedITAT Indore31 May 2024AY 2010-11

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

Section 154

effective grounds:- (i) Challenging the reopening of the completed assessments for Assessment Years 2008-09 to 2015-16; (ii) Challenging the substantive addition for unexplained investment u/s 69 of the Act made for the alleged cash ITA Nos. 286 to 289/Ind/2018 ,719 to 722/Ind/2017 & 862 to 865/Ind/2019 Shri Vardhman Sakh ... pressed. 31. Now we take up second common issue for the substantive addition confirmed in the hands of the assessee for the unexplained investment u/s 69 of the Act made for the alleged cash deposit in the bank account of the society namely Shree Vardhman Sakh Skarita Maryadit of which

Mahavir Kumar Jain, Ujjain vs. I.T.O. 1(1), Ujjain

In the result, All appeals of the assessee are partly allowed

ITA 419/IND/2023[2009-10]Status: DisposedITAT Indore31 May 2024AY 2009-10

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

Section 154

Ebrahimsha Propietor of M/S. Premier Garment Processing, Chennai vs. DCIT Non Corp. Circle 7(1), Chennai

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

ITA 812/CHNY/2024[2018-19]Status: DisposedITAT Chennai31 May 2024AY 2018-19

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.812/Chny/2024 िनधा"रण वष"/Assessment Year: 2018 -19 Ebrahimsha, Proprietor Of M/S. Premier Vs. The Dy./Asstt. Commissioner Of Garment Processing, No. 5, 2Nd Cross Income Tax, Street, Cit Nagar, Thyagaraya Nagar Non Corporate Circle 7(1), H.O., Chennai 600 017. Chennai 600 034. [Pan: Aafpi9651L] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Subramanian, Ca ""थ" की ओर से/Respondent By : Shri A. Sasikumar, Cit सुनवाई की तारीख/ Date Of Hearing : 22.05.2024 घोषणा की तारीख /Date Of Pronouncement : 31.05.2024 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal By The Assessee Is Directed Against The Exparte Order Dated 06.03.2024 Passed By The Ld. Commissioner Of Income Tax, National Faceless Appeal Centre [Nfac], Delhi For The Assessment Year 2018-19 Challenging Confirmation Of Assessment Order, Wherein, The Investments Made In The Property Has Been Treated As Unexplained Investment Under Section 69 Of The Income Tax Act, 1961 [“Act” In Short] As Well As Taxing The Addition At Higher Rate Under Section 115Bbe Of The Act.

For Appellant: Shri R. Subramanian, CAFor Respondent: Shri A. Sasikumar, CIT

Section 115BSection 69

NFAC], Delhi for the assessment year 2018-19 challenging confirmation of assessment order, wherein, the investments made in the property has been treated as unexplained investment under section 69 of the Income Tax Act, 1961 [“Act” in short] as well as taxing the addition at higher rate under section 115BBE ... perusal of the record, we note that the assessee, having aggrieved by the order of the Assessing Officer in making addition on account of unexplained investment to an extent of ₹.11,77,00,000/- under section 69 of the Act, the assessee preferred an appeal before

Ariyapillai Venkatakrishnan, Chennai vs. ACIT, Non Corp Circle 4(1)`, Chennai

In the result the appeal is partly allowed

ITA 703/CHNY/2024[2017-18]Status: DisposedITAT Chennai31 May 2024AY 2017-18

Bench: Shri Aby T. Varkey, Jm & Shri Amitabh Shuklaआयकर अपील सं./Ita No.703/Chny/2024 निर्धारण वर्ा /Assessment Year: 2017-18

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

Section 131Section 143(2)Section 69

Hence, the AO, in the absence of any documentary evidence and without any satisfactory explanation, the amount of Rs.20.25.000/- was treated as unexplained investment u/s 69 :- 3 -: of the Act and added back to the total income of the assesse. The Ld. CIT(A) dismissed the assesses appeal on account

Chandraprabha, Puducherry vs. ITO, Ward-1, Puducherry

In the result the appeal is partly allowed

ITA 681/CHNY/2024[2017-18 ]Status: DisposedITAT Chennai31 May 2024

Bench: Shri Aby T. Varkey, Jm & Shri Amitabh Shuklaआयकर अपील सं./Ita No.681/Chny/2024 निर्धारण वर्ा /Assessment Year: 2017-18

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

Section 133(6)Section 143(2)Section 144Section 69

towards sales. The explanation of the assessee regarding the cash deposits was found unsatisfactory to the assessee and hence the same is treated as unexplained investment u/s 69 of the Act. Subsequently, the AO completed the assessment u/s. 144 of the Act by making an addition of Rs.25 ... account of unexplained investment u/s 69 of the Act. Aggrieved by the order of the AO, the assessee preferred the appeal before Ld.CIT(A). 5.0 The Ld.CIT(A) dismissed the appeal vide order mentioned Supra holding that the assesse did not avail the opportunities given by him and proceeded

Shrinidhi Pattin Sahakari Sangh Niyamit, Vijayapur vs. Income-Tax Office, Ward-3, Bijapur

ITA 616/BANG/2024[2017-18]Status: DisposedITAT Bangalore31 May 2024AY 2017-18

Bench: Shri Laxmi Prasad Sahu & Keshav Dubeyassessment Year : 2017-18

For Appellant: Smt. Pratibha R, AdvocateFor Respondent: Shri Ganesh R Gale, Standing Counsel for Department (DR)

Section 115BSection 133(6)Section 142(1)Section 69ASection 80P(2)(a)

with the following grounds of appeal:- “The ld. CIT(A) erred in confirming the addition made by AO by applying the provision of sec.69A Unexplained investment and denied the exemption u/s 80P(2)(a)(i) in the manner which he did Page 2 of 7 The learned CIT(A) erred

Rushikesh Jagdishchandra Naik, Ghatkopar (East) vs. Income Tax Officer Ward 16(3)(1) Mumbai, Mumbai

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

ITA 4850/MUM/2023[2013-14]Status: DisposedITAT Mumbai31 May 2024AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Sunil Kumar Singh, Jm Rushikesh Jagdishchandra Naik 10 2Nd Floor, Sandeep Building Income Tax Officer Tilak Nagar, Ward No.16(3)(1) M.P. Vaidya Marg, Ghatkopar Aaykar Bhavan, Vs. East, Rajawadi S.O. Mumbai-400 020 Mumbai-400 077 (Appellant) (Respondent) Pan No. Aaapn7066R : Mr. Satyaprakash Singh, Ar Assessee By Revenue By : Smt. Mahita Nair, Dr Date Of Hearing: 28.05.2024 31.05.2024 Date Of Pronouncement :

For Respondent: Smt. Mahita Nair, DR

Section 142(1)Section 144Section 147Section 148Section 250Section 44ASection 69

rejecting the contention of the Appellant that the same was out of past savings. 5. ADDTION OF RS.1,01,28,895/- ΟΝ ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES UNDER SECTION 69. (A) On facts and circumstances of the case and in law, the Honorable C.I.T(A) has erred in confirming ... addition of Rs.1,01,28,895/- being unexplained investment in the purchase of the shares. 6. Addition of ₹1,01,28,895/- on account of unexplained investment in shares under Section 69. Rushikesh Jagdishchandra nail; A.Y. 2013-14 (A) The appellant craves leave to add to, amend or alter

Bestline Properties Pvt. Ltd, Mumbai vs. ITO-12(1)(3), Mumbai

In the result, the appeal filed by the assessee is

ITA 3500/MUM/2023[2009-10]Status: DisposedITAT Mumbai31 May 2024AY 2009-10

Bench: Shri Pavan Kumar Gadale & Ms Padmavathy S

Section 148Section 68

proper course would have been to make assessments in the cases of those creditors by treating the cash deposits in their bank accounts as unexplained investments of those creditors under s. 69." h. The recent decisions by the honourable Mumbai, ITAT in case of a) Mumbai ITAT J - Bench Order

Dr. Kusumchandra S. Ambhutre, Navi Mumbai vs. ITO - 16(2)(5), Mumbai

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

ITA 473/MUM/2021[2012-13]Status: DisposedITAT Mumbai31 May 2024AY 2012-13

Bench: Shri Narender Kumar Choudhry (Jm) & Smt. Renu Jauhari (Am)

Section 143(3)Section 263Section 69

with section 263 of the Income Tax Act ultimately made following additions/disallowances: (i) Rs. 1,05,00,000/- addition for unapproved loan treated as unexplained investment under section 69 of the I.T. Act. (ii) Rs. 8,87,475/- disallowance of interest paid on security loan. (iii) Rs.3,06,084/- disallowance

Sumit Goyal, Gaziabad vs. ITO, Ward-2(3), Gazizbad

ITA 241/DEL/2024[2012-13]Status: DisposedITAT Delhi31 May 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Avdhesh Kumar Mishra

Section 133(6)Section 147Section 69

National Faceless Appeal Centre (NFAC), New Delhi [In Short, the ‘CIT(A)’]. 2. The sole issue before us for adjudication is the taxability of unexplained investment of Rs. 14,85,560/-. 1 3. The relevant facts, giving rise to this appeal, are that the appellant/assessee, an employee of a private ... short, the ‘Act’) on 28.12.2019 at income of Rs.36,70,510/-wherein the AO taxed entire purchase cost of the flat as unexplained investment under section 69 of the Act. 4. Aggrieved, the appellant/assessee filed appeal before the CIT(A), who allowed part relief. The unexplained investment of Rs.14

Veeratham Sachdev, New Delhi vs. DCIT Circle International Taxation, New Delhiq

In the result, both the appeal of the assessee are allowed for

ITA 390/DEL/2023[2016-17]Status: DisposedITAT Delhi31 May 2024AY 2016-17

Bench: Dr. Brr Kumar & Shri Sudhir Pareek

For Appellant: Shri Harshit Chauhan, AdvFor Respondent: Shri Vijay B Vasanta, CIT- DR

mutual funds amounting to Rs. 5,05,00,000/- remains unexplained, thus, the amount of Rs. 5,05,00,000/- is being added as unexplained investment u/s 69 of the Income Tax Act, 1961.” 10. Since the directions of the Ld. DRP have not been followed

Veeratham Sachdev, New Delhi vs. DCIT Circle International Taxation, New Delhi

In the result, both the appeal of the assessee are allowed for

ITA 374/DEL/2023[2013-14]Status: DisposedITAT Delhi31 May 2024AY 2013-14

Bench: Dr. Brr Kumar & Shri Sudhir Pareek

For Appellant: Shri Harshit Chauhan, AdvFor Respondent: Shri Vijay B Vasanta, CIT- DR

Rajesh Sahni, New Delhi vs. ITO Ward 60(5), New Delhi

In the result, this appeal is allowed as indicated above for

ITA 3295/DEL/2023[2016-17]Status: DisposedITAT Delhi31 May 2024AY 2016-17

Bench: Shri S Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Samyak Jain, AdvFor Respondent: Shri Om Parkash, Sr. DR

Section 143(3)Section 271ASection 271BSection 44A

made vide order dated 30.12.2018 at assessed income of Rs.31,74,504/- after making an addition of Rs.25,32,774/- on account of unexplained investment. Page 3 of 6 ITA No.- 3295/Del/2023 Rajesh Sahni 4. At the outset, the Ld. Counsel for the assessee stated that the appeal has been

Pritesh Lalitbhai Pandya, Ahmedabad vs. The ITO, Ward-3(2)(9), Ahmedabad

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

ITA 674/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad30 May 2024AY 2016-17

Bench: Ms. Suchitra R. Kambleassessment Year: 2016-17 Pritesh Lalitbhai Pandya Income Tax Officer, Vs B/15, Krushnvila Bungalows, Ward-3(2)(9), Nr. Radhanagar Society, Isanpur Road, Ahmedabad Jamalpur Road, Ghodasar, Ahmedabad-382450 Pan : Bxwpp 8078 D अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Mehul Thakkar, Ar Revenue By : Shri Sanjay Jain, Sr Dr सुनवाई की तारीख/Date Of Hearing : 10/04/2024 घोषणा की तारीख /Date Of Pronouncement : 30/05/2024

For Appellant: Shri Mehul Thakkar, ARFor Respondent: Shri Sanjay Jain, Sr DR

Section 142(1)Section 143(1)Section 143(2)Section 250Section 69

facts, and in law, both the learned A.O. and Ld. CIT(A) has grievously erred in treating the amount of Rs.12,64,148/- as unexplained investment under section69 of the Income Tax Act, 1961.” 3. The assessee filed return of income on 28.10.2016 declaring total income at Rs.3 ... bank statements etc. Thus, the Assessing Officer made addition of Rs.12,64,148/- under the provisions of Section 69 of the Act as unexplained investment. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee

Sh. Gopal Singh Sunda, Sikar vs. DCIT, Central Circle-2, Jaipur

ITA 797/JPR/2023[2018-19]Status: DisposedITAT Jaipur30 May 2024AY 2018-19

For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Arvind Kumar (CIT)

Section 127Section 132Section 133ASection 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153CSection 69C

आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR डा० एस. सीतालक्ष्मी, न्यायिक

Sh. Gopal Singh Sunda, Sikar vs. DCIT, Central Circle-2, Jaipur

In the result, the seven appeals of the assessee are allowed

ITA 796/JPR/2023[2017-18]Status: DisposedITAT Jaipur30 May 2024AY 2017-18

For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Arvind Kumar (CIT)

Section 127Section 132Section 133ASection 139(1)Section 142(1)Section 143(2)Section 143(3)Section 153CSection 69C

assessee, there is a clear finding and about which there is no dispute that the amount added in the income of the assessee as unexplained investment or cash credit in the assessment year 1993-94 was the same amount which was credited in the books of account of the assessee ... maintained for the financial year 1992-93, the accounting period of which ends on March 31, 1993, so as to warrant its consideration as unexplained investment or cash credit for its relevant assessment year 1993-94. 6. It does not require any elaborate argument that a carried forward amount