“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

DCIT Central Circle-20, Delhi vs. Preeti Mittal, Delhi

In the result, the appeals filed by the Revenue are dismissed

ITA 830/DEL/2022[2011-12]Status: DisposedITAT Delhi26 Apr 2024AY 2011-12

Bench: or during the course of hearing of the appeal.”

Section 142ASection 153A(1)(a)Section 56(2)(vii)Section 69A

appears from the assessment order and confirmed in the submissions of the assessee. Therefore, in the current assessment year, additions on account of unexplained investment in the property could have been made by AO only on the basis of incriminating material/evidence found during the search proceedings

Shri Shivajirao R.Chavan, Ahmedabad vs. The Income Tax Officer, Ward-13(2), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1578/AHD/2006[2001-02]Status: DisposedITAT Ahmedabad25 Apr 2024AY 2001-02

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyalassessment Year : 2001-02 Shivajirao R. Chavan Vs. Ito, Ward-13(2) M-327, Sector 4, K.K. Nagar Ahmedabad. Opp: Water Tank, Ghalodia Ahmedabad.

Section 147Section 250(6)

treating them to be benami properties of the assessee. The property is Ratna Jyoti Complex which was purchased in 1998-99 and treated as unexplained investment of the assessee in the assessment framed for the said year. The property was registered in the name of three co-owners, R.M Chavan

D.Ramgopal, Coimbatore vs. DCIT, Central Circle-1(1), Coimbatore

The appeal stand partly allowed in terms of our above order

ITA 582/CHNY/2022[2012-13]Status: DisposedITAT Chennai25 Apr 2024AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.582/Chny/2022 (िनधा)रण वष) / Assessment Year: 2012-13) Shri D. Ramagopal Acit बनाम C/O Mr. G.V. Jhabakh (Fca) Central Circle-1 157, P.M Swamy Colony, Coimbatore. / Vs. 5Th Street, Coimbatore-641 002. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Akgpr-3621-L (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri Jhabakh (Ca)- Ld. Ar " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Final Hearing : 18-03-2024 घोषणाकीतारीख /Date Of Pronouncement : 25-04-2024 आदेश / O R D E R Manoj Kumar Aggarwal () 1.1 Aforesaid Appeal By Assessee For Assessment Year (Ay) 2012-13 Arises Out Of An Order Passed By Learned Commissioner Of Income Tax (Appeals)-19, Chennai [Cit(A)] On 25.05.2022 In The Matter Of An Assessment Framed By Ld. Assessing Officer [Ao] U/S 143(3) R.W.S 153A Of The Act On 30.03.2016. The Grounds Raised By The Assessee Read As Under: -

For Appellant: Shri Jhabakh (CA)- Ld. ARFor Respondent: Shri Nilay Baran Som (CIT)-Ld. DR

Section 131Section 132Section 143(3)Section 153ASection 271F

claim of the assessee could not be accepted. Another contention was that similar addition was made in the hands of Sh. S. Nagaraj as unexplained investment. The Ld. CIT(A) rejected the same on the ground that in assessee’s case, the addition was for sale of property. Therefore

Deputy Commissioner of Income -Tax, Central Circle-1(1), Ahmedabad vs. Sanjay Prataprai Mehta, Bhavnagar

In the result, appeal of the Department is dismissed

ITA 897/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2014-15

Bench: Shri Siddhartha Nautiyal & Shri Makarand Vasant Mahadeokar

For Appellant: Shri Sudhendu Das, CIT DRFor Respondent: Shri Tushar P Hemani, Sr. Advocate & Shri

Section 10(38)Section 271(1)(c)

penalty under Section 271(1)(c) could be levied. In the case of CIT v. Shishpal 126 Taxman 5 (Rajasthan), addition was made as unexplained investment under Section 69 DCIT vs. Sanjay Prataprai Mehta Asst.Year –2014-15 - 10– and penalty was imposed under Section 271(1)(c).The aforesaid addition

Smitaben Rajnikant Dave Legal Rep. Kalaen R. Joshi, Ahmedabad vs. The Itao, Ward-6(1)(4), Ahmedabad

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

ITA 1119/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2011-12

Bench: Ms. Suchitra Kamble (Judicial Member)

For Appellant: Shri A.P. Nanavaty, A.RFor Respondent: Shri Urjit B. Shah, Sr. D.R

Section 139(1)Section 142(1)Section 143(2)Section 144Section 148

time deposit and Rs. 11,644/- as bank interest received was added to the total income of the assessee treating the same 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

M/S. Shivam Developers, Gandhinagar vs. The DCIT, Mehsana Circle, Mehsana

In the result, the appeal of the assessee is partly allowed

ITA 226/AHD/2020[2012-13]Status: DisposedITAT Ahmedabad24 Apr 2024AY 2012-13

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokar, Accountnat Member Assessment Year : 2012-13 M/S.Shivam Developers The Dy.Cit Plot No.C/1, 1301, Phase-I Vs Mehsana Circle Gidc, Chhatral, Tal.Kalol Mehsana Dist. Gandhinagar – 382 229 Pan: Abwfs 4815 N अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Hardik Vora, Ar & Shri Daivat Bhatt, Ar Revenue By : Shri Ashesh R. Rewar, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 17/04/2024 घोषणा क" तार"ख /Date Of Pronouncement: 24/04/2024 आदेश/O R D E R Per Makarand V. Mahadeokarthe Present Appeal Has Been Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Gandhinagar, Ahmedabad [Hereinafter Referred To As “Cit(A)” In Short] Arising In The Matter Of Assessment Order Passed Under S. 143(3) R.W.S. 147 Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Relevant To The Assessment Year (Ay) 2012-13. 2. The Assessee Has Raised Following Grounds Of Appeal: M/S.Shivam Developers Vs. Dcit Mehsana Asst. Year : 2012-13

For Appellant: Shri Hardik Vora, AR &For Respondent: Shri Ashesh R. Rewar, Sr.DR

Section 148Section 69C

source of the funds received by them which were given as loan to the assessee than its unexplained amount could be treated as unexplained investment in the hands of the depositors u/s.69 of the Act or other section but could not be taxed in the hands of the assessee

Tribhuvan Sharda, Jaipur vs. Income Tax Officer Ward 6 (2), Jaipur

In the result, the appeal of the assessee is partly allowed

ITA 199/JPR/2024[2007-2008]Status: DisposedITAT Jaipur24 Apr 2024AY 2007-2008

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Sanjeev Kumar Mathur, CAFor Respondent: Shri Anoop Singh, Addl. CIT-DR

Section 148Section 151Section 69

unexplained cash deposits amounting to Rs. 73,17,000/-, which is deposited by the assessee in his bank account is treated as unexplained investment and assessed as his undisclosed income for the assessment year under consideration. Thus an addition of Rs. 73,17,000/- is hereby made in the total ... contested the addition of Rs.13,17,000/- made u/s 69 on account of unexplained cash deposited in the bank account treating the same as unexplained investment. 6.1 The appellant submitted that the cash was deposited in bank accounts out of cash balance available in the cash book which

Kuldeep Kishore Sharma, Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-2, Jaipur

ITA 602/JPR/2023[2018-19]Status: DisposedITAT Jaipur24 Apr 2024AY 2018-19

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

For Appellant: Shri S. R. Sharma (CA) &For Respondent: Shri Ajay Malik (CIT) a

Section 131Section 132(1)Section 143(1)Section 153CSection 69A

made by the ld. AO to the income of the appellant u/s 69A of the IT. Act, 1961 on account of alleged unexplained investment in loan by the appellant through Shri Jai Pal Singh on the basis of papers seized from him during course of search at his residence ... made by the Ld. AO to the income of the appellant u/s 69A of the IT Act, 1961 on account of alleged unexplained investment in loan by the appellant through Shri Jai Pal Singh on the basis of papers seized from him during course of search at his residence

Kuldeep Kishore Sharma, Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-2, Jaipur

ITA 601/JPR/2023[2017-18]Status: DisposedITAT Jaipur24 Apr 2024AY 2017-18

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

For Appellant: Shri S. R. Sharma (CA) &For Respondent: Shri Ajay Malik (CIT) a

Section 131Section 132(1)Section 143(1)Section 153CSection 69A

Shri Manoj Ramsakal Rai, Mumbai vs. ACIT Circle-3, Kalyan

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

ITA 4093/MUM/2023[2011-12]Status: DisposedITAT Mumbai24 Apr 2024AY 2011-12

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Blemanoj Ramsakal Rai V. Acit – Circle – 3 Harikunj, Santosh Nagar 2Nd Floor, Rani Mansion Tisgaon, Kalyan (E)-421306 Murbad Road Kalyan (W)-421301 Pan: Aaopr1362Q (Appellant) (Respondent) Assessee Represented By : Dr. P. Daniel Department Represented By : Smt Mahita Nair

Section 143(2)Section 144Section 234ASection 69

Learned CIT(A) erred in confirming the addition u/s. 69 of the 1. T. Act, an amount of Rs. 80,80,000/- as unexplained investment disregarding the Remand Report. 5. The Learned CIT(A) erred in adding an amount of Rs. 1,09,00,000/- as unexplained investment

Manisha Prashar, Kharar vs. ITO, Ward-6(4), Mohali

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

ITA 462/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh23 Apr 2024AY 2012-13

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

For Appellant: Shri Amitoz Singh Kamboj, CAFor Respondent: Shri Dharam Vir, JCIT, Sr. DR

Section 143(2)Section 143(3)Section 148Section 69

under Section 69 of the Act holding the cash payment made by the assessee towards booking of the plot as unexplained investment. 5. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has since dismissed the appeal and the addition so made ... advance money for booking of the plot and it is held that these were from his undisclosed sources. Thus it is an unexplained investment in the terms of Section 69 of the I.TAct, 1961 and held accordingly. 9. In view of the above facts, a sum of Rs. 36.45 lakhs

Smt. Krishna, Uttar Pradesh vs. Income Tax Officer, Gautam Budh Nagar

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

ITA 3921/DEL/2023[2012-13]Status: DisposedITAT Delhi23 Apr 2024AY 2012-13

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: NoneFor Respondent: Sh. Om Prakash, Sr. DR

Section 148Section 69

with the provisions of the Act. 2. Making an addition of Rs. 35,26,425/- u/s 69 of the Income Tax Act, 1961 towards unexplained investment in land. 3. Not accepting the submission of the Assessee who is an uneducated childless widow, senior citizen & totally dependent on her brother Shri

Rakesh Kumar Aggarwal, Delhi vs. ACIT, Delhi

In the result, the appeal of the assessee is allowed

ITA 1912/DEL/2021[2012-13]Status: DisposedITAT Delhi23 Apr 2024AY 2012-13

Bench: Dr. B. R. R. Kumarms. Astha Chandra

For Appellant: Sh. Amit Goel, CA &For Respondent: Sh. Amit Katoch, Sr. DR

Section 143(3)Section 147Section 148

total investment of Rs.52,57,738/- made for purchase of Castor Seed and payment for such investment has been duly examined. There is no unexplained investment. There is no case of any unexplained credit. Hence, there is no case of any income escaping assessment. 8. Ergo, the appeal

Anil Gupta (HUF), Hyderabad vs. Income Tax Officer, Ward 8(3), Hyderabad

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

ITA 305/HYD/2024[2012-2013]Status: HeardITAT Hyderabad22 Apr 2024AY 2012-2013

Bench: Shri Manjunatha, G.आ.अपी.सं /Ita No.305/Hyd/2024 (िनधा"रण वष" / Assessment Year: 2012-13) Shri Anil Gupta (Huf) Vs. Income Tax Officer Hyderabad Ward 8(3) Pan:Aajha0786J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Pankaj Sancheti, Ca राज" व "ारा/Revenue By:: Smt. Vishnu Priya, Dr सुनवाई की तारीख/Date Of Hearing: 22/04/2024 घोषणा की तारीख/Pronouncement: 22/04/2024

For Appellant: Shri Pankaj Sancheti, CAFor Respondent: : Smt. Vishnu Priya, DR

Section 115BSection 144Section 147Section 148Section 69Section 69A

completed the assessment u/s 144 r.w.s. 147 of the Act on 30.12.2019 and made addition of Rs.5.00 lakhs u/s 69 of the Act as unexplained investment towards purported investment claims to have been made for acquiring bonds/debentures. The assessee carried the matter in appeal before the first appellate authority ... assessee. 6. We have heard both the parties and considered the relevant reasons given by the Assessing Officer to make the addition towards unexplained investment u/s 69A of the Act. The Assessing Officer has made addition of Rs.5.00 lakhs towards purported investment made by the assessee in acquiring bonds/debentures

Smt. Aruna, Bangalore vs. Income-Tax Officer, Ward-1(2)(2), Bangalore

In the result, appeal of the assessee is dismissed

ITA 537/BANG/2024[2017-18]Status: DisposedITAT Bangalore22 Apr 2024AY 2017-18

Bench: Shri Chandra Poojari & Shri Keshav Dubeyassessment Year: 2017-18

For Appellant: Shri Sukruth N. Segu, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for department

Section 139(1)Section 142(1)Section 142(1)(i)Section 144Section 144CSection 44ASection 68

applicable to the facts of the assessee's case and the treatment of Rs.18,30,591 of the cash deposited into bank account as Unexplained Investment u/s 69A of the Act is not tenable in law and on facts. He humbly and earnestly prayed that addition of Rs.18 ... unexplained investment u/s 69A of the Act made in the assessment order is deleted and justice rendered. 4. The ld. D.R. relied on the order of lower authorities. 5. We have heard the rival submissions and perused the materials available on record and gone through all case laws relied

Chandra Shekar Chikkamagaluru Jayaram, Chikkamagalur vs. Income-Tax Officer, Ward-1, Chikkamagalur

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

ITA 521/BANG/2024[2017-18]Status: DisposedITAT Bangalore22 Apr 2024AY 2017-18

Bench: Shri Chandra Poojari & Shri Keshav Dubeyassessment Year: 2017-18

For Appellant: Sri H. Guruswamy, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Department

Section 144Section 250Section 69

that the assessment order was completed u/s 144 of the Income Tax Act, 1961 (in short “The Act”) making addition of Rs.26 lakhs towards unexplained investment by way of investment into bank account. Since the assessment was framed ex- parte, the assessee went in appeal before

Pankaj Sharma, Delhi vs. Income Tax Officer, Ward 30(8), New Delhi

In the result, the appeal is allowed for statistical purposes

ITA 2949/DEL/2023[2017-18]Status: DisposedITAT Delhi22 Apr 2024AY 2017-18

Bench: Shri Challa Nagendra Prasad:Assessment Year: 2017-18

Section 250Section 69ASection 80CSection 80G

Appellant during the demonetization period have been deposited as cash in the bank which are not accountable and have been treated as unexplained investment in bank by way of deposits. That the Appellant having produced necessary details of receipts and corresponding payments as expe3nditure, itself satisfies that the only resultant ... contracted operation of tour at best can be subjected to tax and not the amount deposited in the bank is to be treated as unexplained investment. 4. Because the Assessing Officer failed to appreciate that the Appellant have received in cash from the schools from wehich 3 the Appellant

Suryanarayana Reddy Tondapu, Kakinada vs. Income Tax Officer, Ward-1, Kakinada

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

ITA 170/VIZ/2023[2017-18]Status: DisposedITAT Visakhapatnam19 Apr 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Ble(Through Hybrid Hearing) आयकर अपील सं./ I.T.A. No.170/Viz/2023 (निर्धारण वर्ा / Assessment Year : 2017-18) Suryanarayana Reddy Tondapu, Vs. Income Tax Officer, Kakinada. Ward-1, Pan: Adppt 6393 K Kakinada. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Appellant By : Sri Dl Narasimha Rao, Ar प्रत्यधर्थी की ओर से / Respondent By : Dr. Aparna Villuri, Sr. Ar सुिवधई की तधरीख / Date Of Hearing : 26/03/2024 घोर्णध की तधरीख/Date Of : 19/04/2024 Pronouncement O R D E R Per Duvvuru Rl Reddy:

For Appellant: Sri DL Narasimha Rao, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 143(3)Section 148Section 187(1)Section 197Section 250Section 4Section 69

attributable to the voluntary disclosure of Rs. 20 lakhs under IDS scheme notified by the Government may not tantamount to unexplained investment within the ambit of section 69 of the Act, particularly when there was no investment at all to the aforesaid extent, indulged in by the assessee ... made by the assessee in a general way so as to cover any inherent defects in the accounting record and not towards any unexplained investment within the meaning of section 69 of the Act, formulation of addition U/s. 69 of the Act and charging the tax at the special rate

Smt Pawanben Pannalal Gulecha, Mumbai vs. The ITO, Ward-18(2)(5), Mumbai

In the result, both the appeals of the assessee are allowed on merits

ITA 2844/MUM/2023[2010-2011]Status: DisposedITAT Mumbai19 Apr 2024AY 2010-2011

Section 10(38)Section 143(3)Section 147Section 148Section 68

through exit providers. Accordingly, AO has concluded that assessee has made share transaction of Rs.9,47,33,726/- as unexplained money and treated as unexplained investment and taxed the whole proceeds of sale of shares as unexplained investment u/s.68. 8. Ld. CIT (A) has confirmed the addition on same reasoning

Shri Pannalal Hastimal Gulecha, Mumbai vs. The ITO, Ward-23(2)(7), Mumbai

In the result, both the appeals of the assessee are allowed on merits

ITA 2228/MUM/2023[2012-13]Status: DisposedITAT Mumbai19 Apr 2024AY 2012-13

Section 10(38)Section 143(3)Section 147Section 148Section 68