“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

Rajeshvari Devi Sharma, Jaipur vs. Income Tax Officer, Ncrb, Jaipur

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

ITA 16/JPR/2024[2013-14]Status: DisposedITAT Jaipur13 Feb 2024AY 2013-14

Bench: SHRI SANDEEP GOSAIN (Judicial Member), Dr. MITHA LAL MEENA (Accountant Member)

For Appellant: NoneFor Respondent: Mrs. Monisha Choudhary, Addl CIT-DR

Section 142(1)Section 144Section 147Section 148

justified in confirming addition of ₹13,83,200/-, made by AO, on account of investment in property out of reserved funds as alleged unexplained Investment. 2 RAJESHWARI DEVI SHARMA VS ITO,WARD 1(1), JAIPUR (b) On the facts and in the circumstances of the case ... Facts and in the circumstances of the case the Ld. CIT(A) was not justified in confirming as contended that the A.O. held the unexplained investment as purely non-genuine based on no evidence or on irrelevant evidence, and on surmises and conjectures. 2.1 None appeared on behalf

The ACIT, Circle-9, Ahmedabad vs. Shri Ghanshyam P. Hirpara, Ahmedabad

Accordingly, summarily dismissed

ITA 2955/AHD/2014[2008-09]Status: DisposedITAT Ahmedabad09 Feb 2024AY 2008-09

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

cash payment against the cheque as “4.5:1” The A.O. held that these agricultural lands are purchased by assessee in his personal capacity & unexplained investment in these lands by him. A.O. worked out unaccounted cash payment involved in these blocks as under for the A.Y. 2008-09 Total Sale Price ... Thus A.O. made total addition of Rs.4,04,14,657/- (Rs.1,78,59,195/-+Rs.2,25,55,462/-) as unexplained investment in agricultural lands for the Asst. Years 2008-09 & 2009-10 and demanded taxes thereon. 4. Aggrieved against the reassessment orders, the assessee filed appeals before Commissioner of Income

The DCIT, Circle-9, Ahmedabad vs. Shri Ghanshyambhai P. Hirpara, Ahmedabad

Accordingly, summarily dismissed

ITA 1425/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad09 Feb 2024AY 2009-10

Bench: Shri Waseem Ahmed (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Shri Umang H. Thakkar, Ahmedabad vs. The Dy.CIT., Ward-7(2), Ahmedabad

In the result, appeal filed by the revenue is dismissed and appeal filed by assessee is partly allowed for statistical purposes

ITA 796/AHD/2011[2007-08]Status: DisposedITAT Ahmedabad09 Feb 2024AY 2007-08

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Waseem Ahmed (Accountant Member)

For Appellant: Shri S.N. Soparkar, Sr. A.R. &For Respondent: Shri Ahilendra Pratap Yadaw, CIT-D.R

Section 145Section 40Section 69CSection 801B(10)Section 80ASection 80I

progress and the balancing figure was offered by the assessee as cost profit and the balancing figure was taken by the Assessing Officer as unexplained investment. Thus, the CIT(A) was right in deleting this addition thereby holding that the amount of unexplained income has already been offered

The DCIT, Circle-11, Ahmedabad vs. Shri Umang Hiralal Thakkar, Ahmedabad

In the result, appeal filed by the revenue is dismissed and appeal filed by assessee is partly allowed for statistical purposes

ITA 760/AHD/2011[2007-08]Status: DisposedITAT Ahmedabad09 Feb 2024AY 2007-08

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Waseem Ahmed (Accountant Member)

For Appellant: Shri S.N. Soparkar, Sr. A.R. &For Respondent: Shri Ahilendra Pratap Yadaw, CIT-D.R

Section 145Section 40Section 69CSection 801B(10)Section 80ASection 80I

Sh. Madan Lal Gupta, Keshav Nagar, Alwar vs. Addl. CIT, Central Range, Jaipur

In the result appeal of the assessee in ITA No

ITA 580/JPR/2023[2017-18]Status: DisposedITAT Jaipur09 Feb 2024AY 2017-18

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

For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Anoop Singh (Addl. CIT) a

Section 115BSection 132Section 132(4)Section 139Section 142(1)Section 143(2)Section 143(3)Section 153ASection 271D

made addition in the hands of the assessee in earlier years as follows:- AY Addition Reason for addition 2012-13 15,00,000/- Unexplained investment in purchase of property 2015-16 2,77,466/- Difference between the sales consideration and Stamp Duty Value is added ... assessee in earlier years as follows as argued by the ld. AR:- AY Addition Reason for addition 2012-13 15,00,000/- Unexplained investment in purchase of property 2015-16 2,77,466/- Difference between the sales consideration and Stamp Duty Value is added u/s 56(2)(vii)(b) Total

Sh. Madan Lal Gupta, Keshav Nagar, Alwar vs. ACIT, Central Circle, Alwar

In the result appeal of the assessee in ITA No

ITA 579/JPR/2023[2017-18]Status: DisposedITAT Jaipur09 Feb 2024AY 2017-18

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

For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Anoop Singh (Addl. CIT) a

Section 115BSection 132Section 132(4)Section 139Section 142(1)Section 143(2)Section 143(3)Section 153ASection 271D

DCIT Central Circle-16, New Delhi vs. Suboli Ice and Cold Storage Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue and cross-objection

ITA 2143/DEL/2023[2018-19]Status: DisposedITAT Delhi08 Feb 2024AY 2018-19

Bench: Shrichalla Nagendra Prasad& Dr. Brr Kumarassessment Year: 2018-19

Section 132Section 133A

valued the stock taking the rates prevailing as on the date of survey and made an addition of Rs.54,10,76,600/- as an unexplained investment of the assessee under Section 69 of the Act. The assessee preferred an appeal before the learned Commissioner of Income-Tax (Appeals) and made

P. Krishnamurthy, Villupuram vs. ITO, Ward-2, Villupuram

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

ITA 773/CHNY/2023[2013-14]Status: DisposedITAT Chennai07 Feb 2024AY 2013-14

Bench: Shri Mahavir Singh

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Shri G.Suresh, JCIT

Section 143(1)Section 143(2)Section 143(3)Section 246ASection 249(2)(b)Section 264Section 69

notice u/s.143(2) of the Act. The AO framed assessment u/s.143(3) of the Act vide order dated 24.03.2016. The AO made addition of unexplained investment u/s.69 of the Act and also addition of bank interest. The assessee instead of filing of appeal before CIT(A) against this assessment order

Prashant Pitti, Delhi vs. ACIT, Central Circle-4, Delhi

In the result, the appeal of the assessee is allowed

ITA 3032/DEL/2022[2016-17]Status: DisposedITAT Delhi07 Feb 2024AY 2016-17

Bench: Shri M. Balaganesh & Ms. Astha Chandraasstt. Year 2016-17 Prashant Pitti, Vs. Acit, C-179, Central Circle-4, Vivek Vihar, Delhi. New Delhi-110095. Pan Awxpp4522D (Appellant) (Respondent)

For Appellant: Shri Nirbhay Mehta, Adv. &For Respondent: Shri P N Barnwal, CIT (DR)

Section 131Section 132Section 143(3)Section 153ASection 250Section 251(1)(a)Section 68Section 69A

cash credit ‘may be charged to income tax as the income of the assessee of that previous year’, section 69 to 69C ‘deem the unexplained investment, unexplained money etc., amount of investment etc., not fully disclosed in books of accounts and unexplained expenditure etc., to be the income

Ultimate Creations, New Delhi vs. ACIT Central Circle-4, 110055

In the result, the appeal of the assessee is allowed

ITA 1590/DEL/2021[2017-2018]Status: DisposedITAT Delhi07 Feb 2024AY 2017-2018

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. Amit Katoch, Sr. DR

Section 115BSection 133ASection 142(1)Section 69

made by the AO on account of excess stock found during the course of survey holding the same as unexplained investments under section 69 read with the section 115BBE of the Income Tax Act. (ii) That the abovesaid addition has been confirmed ignoring the detailed submissions and explanations along with ... documents and evidences and the independent inquiry made by the AO himself and made an addition of Rs.6,13,75,028/- on account of unexplained investments u/s 69 of the Act. 10. Aggrieved, the assessee filed appeal before the CIT(A) who affirm the order of the Assessing Officer

Radhey Shyam Yadav, Jaipur vs. Income Tax Officer, Jaipur

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

ITA 814/JPR/2023[2011-2012]Status: DisposedITAT Jaipur06 Feb 2024AY 2011-2012

For Appellant: Ms. Nargis Parveen, CAFor Respondent: Mrs. Monisha Choudhary, Addl CIT-DR

Section 139(1)Section 144Section 148Section 69

assessee ### RADHEY SHYAM YADAV VS ITO 7 (2), JAIPUR offered no explanation about the investment made in property therefore, the same was treated as unexplained investment in property by the AO. Thus, the amount of Rs 21,00,000/- was treated as income of the assessee and added back

Mohd Hussain Kagdi, Ratlam vs. The It&Tp, Bhopal

Appeal is allowed

ITA 120/IND/2021[2011-12]Status: DisposedITAT Indore05 Feb 2024AY 2011-12

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year:2011-12 Mohd. Hussain Kagdi, Ito (I.T. & T.P.), 15, Tripoliya Gate, Bhopal बनाम/ Ratlam Vs. (Appellant/Assessee) (Respondent/Revenue) Pan: Atzpk 4811 B Assessee By Shri Rajesh Mehta, Ca & Shri Apurva Mehta, Ca Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 04.01.2024 Date Of Pronouncement 05.02.2024

Section 143(2)Section 143(3)Section 147Section 148Section 149Section 151Section 254(2)Section 69Section 69A

circumstances of the case and in law, the ld. AO has erred in treating the amount of Rs. 37,75,000/- as unexplained investment of the assessee u/s 69 of the Act and the Ld. CIT(A) has further erred in treating the same as unexplained cash in hand ... Bhopal I.T.A.No. 120/Ind/2021 – A.Y. 2011-12 the addition of Rs. 37,75,000/- made by AO u/s 69 on account of unexplained investment in agricultural land at Ratlam. 5. Apropos to the ground Nos. 1 & 2, the Ld. AR for assessee carried us to Para No. 3 of assessment-order

Nagaraja Kamath Kogganna Udayavara, Bangalore vs. Income-Tax Officer, Ward-3(3)(4), Bengaluru

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

ITA 894/BANG/2023[2017-18]Status: DisposedITAT Bangalore02 Feb 2024AY 2017-18

Bench: Shri George George K. & Shri Chandra Poojari

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

Section 143(3)Section 250Section 69A

sources of income other than salary income. These facts are undisputed. The ld. AO has however made addition u/s 69A of the Act as unexplained investment. He submitted that the law on this issue is fairly settled by the decision of the Hon'ble Supreme Court in the case

Komal Agarwal, Mumbai vs. Dy CIT -CC-7(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 645/MUM/2021[2014-15]Status: DisposedITAT Mumbai02 Feb 2024AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No. 645/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2014-15) Komal Agarwal बिधम / Dcit, Central Circle 7(3) 203, Ugam, N.S Road No.9, Room No 655, 6Th Floor, Vs. Jvpd Scheme, Juhu, Ville Ayakar Bhavan, M.K. Parle (W), Mumbai-400097 Road, Churchgate, Mumbai-400020 स्थधयी लेखध सं/.जीआइआर सं/.Pan/Gir No. : Ahwpr9295B (अपीलार्थी / Appellant) (प्रत्यर्थी / Respondent) ..

For Appellant: Shri Harion TulsiyanFor Respondent: Shri P. D. Chougule

Section 10(38)Section 132Section 68

shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of Rs 1,41,08,484/- represented unexplained investment under section 69 of the Income Tax Act, 1961 cannot be faulted. 8. In the result, we see no merit in this Appeal

Sudesh Dua, Delhi vs. ACIT Central Circle-3, Delhi

In the result, the appeal of the assessee is allowed

ITA 2799/DEL/2022[2019-20]Status: DisposedITAT Delhi01 Feb 2024AY 2019-20

Bench: Shri Challa Nagendra Prasad & Dr. B. R. R. Kumar

For Appellant: Sh. Nirbhay Mehta, CAFor Respondent: Ms. Amisha Gupta, CIT-DR

Section 132Section 139Section 143(1)Section 143(2)Section 143(3)Section 69A

justified, in upholding the addition of Rs. 2,84,691/- made in the assessment order on account of alleged unexplained investment in jewellery and, disregarding the provision contained in Instruction No. 1916 issued by CBDT. 3. That on the facts & circumstances of the case ... Tribunal is reproduced as under: 2. The only effective ground is against upholding the addition made in the assessment order on account of alleged unexplained investment in jewellery and not following the Instruction No. 1916 issued by CBDT. 3. The facts, giving rise to the present appeal, are that

DCIT, Central Circle -III, Ludhiana vs. Sh. Puran Chand, Ludhiana

In the result, we upheld the findings of the ld CIT(A) and the grounds of appeal taken by the Revenue are dismissed

ITA 559/CHANDI/2022[2018-19]Status: DisposedITAT Chandigarh31 Jan 2024AY 2018-19

Bench: Or At The Time Of Hearing Of The Appeal.

For Appellant: Shri Pankaj Bhalla, C.AFor Respondent: Shri Dharam Vir, JCIT, Sr. DR

Section 292CSection 69A

assessee. in our considered view would not be sufficient to make the addition of that figure in the income of the assessee as unexplained investment, assuming that the assessee had written 8 a ores in place of Rs.80 lacs could the AO make the addition of Rs 8 crores

Prakash Amarlal Doulatani, Ahmedabad vs. The Income Tax Officer, Ward-3(3)(4), Ahmedabad

In the result, appeal preferred by the assessee is allowed

ITA 970/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Royआयकर अपील सं./I.T.A. No. 970/Ahd/2023 ("नधा"रण वष" / Assessment Year : 2011-12) Prakash Amarlal The Income Tax Officer बनाम/ Ward -3(3)(4), Ahmedabad Doulatani Vs. 16/318, Satyagrah Chhavni, Near Bhavnirjar, Satellite Road, Ahmedabad - 380015 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaspd3727B (Appellant) .. (Respondent) Shri Vihar Soni, A.R. Assessee By : Shri Urjit Shah, Sr. Dr Revenue By : सुनवाई क" तार"ख / Date Of 30/01/2024 Hearing घोषणा क" तार"ख /Date Of 31/01/2024 Pronouncement O R D E R Per Ms. Madhumita Roy - Jm: The Instant Appeal Filed At The Instance Of The Assessee Is Directed Against The Order Dated 05.10.2023 Passed By National Faceless Appeal Centre (Nfac), Delhi Arising Out Of The Order Dated 22.11.2018 Passed By The Ito, Ward-3(3)(4), Ahmedabad Under Section 143(3) R.W.S. 147 Of The Income Tax Act, 1961, (Hereinafter Referred To As ‘The Act’) For Assessment Year 2011-12, Whereby & Wherunder The Addition Made By The Ld. Ao On Account Of ‘On Money’ Has Been Confirmed.

For Appellant: Shri Urjit Shah, Sr. DR

Section 132Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

assessment proceeding was finalized by making addition of Rs.22,71,000/- as ITA No. 970/Ahd/2023 (Prakash Amarlal Doulatani vs. ITO) A.Y.– 2011-12 - 3 - unexplained investment as ‘on money’, which was further confirmed by the First Appellate Authority. Hence, the instant appeal before us. 3. At the very outset

Bappaditya Chakraborty, Kolkata vs. ACIT, Cir-24, Hooghly

In the result, both the appeals of the assessee is treated as allowed

ITA 899/KOL/2023[2013-14]Status: DisposedITAT Kolkata31 Jan 2024AY 2013-14

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty……..…..…......................…...……………....Appellant C/O Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata – 700069. [Pan: Afupc4296H] Vs. Acit, Circle-24, Hooghly………………............................…..…..... Respondent Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Appellant. Shri Amuldeep Kaur, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 24, 2024 Date Of Pronouncing The Order : January 31, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Are The Two Appeals Preferred By The Assessee, One Is Pertaining To The Quantum Addition & The Other Is Deleting To The Levying Of Penalty U/S 271(1)(C) Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Both The Appeals Of The Assessee Are Time-Barred By 1395 Days. As Per The Affidavit Of The Assessee Namely Shri Bappaditya Chakrabotry, It Has Been Deposed That The Appeal Orders Of The Cit(A) Were Received By The Assessee On 03.09.2019 & Thereafter The Assessee Approached His Advocate, Keshab Lal Mukherjee, For The

Section 271(1)(c)

that the Ld. CIT(A) was not justified in confirming the addition of made by the A.O on account of unexplained investment of Rs.11,00,000/- in shares. 3. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” 4. Ground

Bappaditya Chakraborty, Kolkata vs. ACIT, Cir-24, Hooghly

In the result, both the appeals of the assessee is treated as allowed

ITA 898/KOL/2023[2013-14]Status: DisposedITAT Kolkata31 Jan 2024AY 2013-14

Section 271(1)(c)