“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

Elvis Zepherin Crasto, Mumbai vs. Income Tax Officer, Int Tax Ward 2(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1921/MUM/2022[2018-2019]Status: DisposedITAT Mumbai23 Aug 2023AY 2018-2019

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleelvis Zepherin Crasto V. Income Tax Officer Gorai Village, Jui Pada International Taxation Gorai Essel World Road Ward – 2(1)(1) Borivali (W), Mumbai - 400091 Room No. 1724, 17Th Floor Air India Building Nariman Point, Mumbai – 400 021 Pan: Asgpc6280N (Appellant) (Respondent)

Section 143(2)Section 144C(5)Section 56(2)Section 69

between the SDV and agreement value will be consideration u/s 56(2) as deemed to be income from other sources and "unexplained investment in taxed accordingly. However, the AO has proposed property." to treat the same as unexplained investment u/s 69 without any cogent evidence. 8. After considering the above ... amount of Rs. 2,07.56,500/- being a difference between Agreement and value and as per Stamp duty valuation is hereby treated as unexplained investment u/s. 69 read with section 115BBE of the I. T Act and added to the total income of the assessee under the head "income from

Shri Gurmeet Singh, Bathinda vs. Income Tax Officer Ward- 1 ( 3), Bathinda

In the result, both the appeals of the assesse are allowed for

ITA 148/ASR/2023[2017-18]Status: DisposedITAT Amritsar23 Aug 2023AY 2017-18

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Sudhir Sehgl, ARFor Respondent: Sh. Digvijai Kumar Chaudhary, Sr. DR

Section 142(1)Section 144Section 271FSection 69

That the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts by confirming addition of Rs. 8,41,500/- as unexplained investment u/s 69 of the Income Tax Act on account of deposits in the bank (agriculture limit account) claimed as made out of agriculture income ... That the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts by confirming addition of Rs. 8,41,500/- as unexplained investment u/s 69 of the Income Tax Act on account of deposits in the bank (agriculture limit account) claimed as made out of the exempt

Shri Gurmeet Singh, Bathinda vs. Income Tax Officer Ward-1 (3), Bathinda

In the result, both the appeals of the assesse are allowed for

ITA 147/ASR/2023[2017-18]Status: DisposedITAT Amritsar23 Aug 2023AY 2017-18

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Sudhir Sehgl, ARFor Respondent: Sh. Digvijai Kumar Chaudhary, Sr. DR

Section 142(1)Section 144Section 271FSection 69

Virender Singh, Delhi vs. Io, Ward 38(4), New Delhi

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

ITA 96/DEL/2023[2010-11]Status: DisposedITAT Delhi23 Aug 2023AY 2010-11

Bench: Us. The Assessee Had Stated In His Affidavit

Section 127Section 142(1)Section 147Section 148Section 69

whether the ld. CIT(A) was justified in confirming the addition made in the sum of Rs 56,18,000/- towards unexplained investment in the facts and circumstances of the instant case. 5. We have heard the ld. DR and perused the materials available on record. There ... assessee and hence the ld. AO was forced to complete the assessment exparte by making an addition of Rs 56,18,000/- as unexplained investment made in purchase of immovable property u/s 69 of the Act. 6. Before the ld. CIT(A), the assessee took a stand that source

Mannu Bhatia, Uae vs. ACIT, Circle 1(1)(2), International Taxation, New Delhi

ITA 819/DEL/2023[2016-17]Status: DisposedITAT Delhi23 Aug 2023AY 2016-17

Bench: Sh. G.S.Pannu, Hon’Ble & Sh. Anubhav Sharmash. Mannu Bhatia Vs. Acit, 1704, Mesk Tower, International Tax Al Marsa Road, Dubai Circle 1(1)(2) Marina, Dubai, Uae Pan : Afnpb4279A (Appellant) (Respondent)

Section 142Section 142(1)Section 147Section 196A

parties it comes up that in the present case, the assessee had made certain financial transactions of investments and payments which are treated as unexplained investment. Admittedly assessee has not maintained any books of accounts as it is not compulsory that the assessee must have maintained the books of accounts

Shalini Gupta, Germany vs. ACIT, Circle Int.Tax. 1(3)(1), New Delhi

ITA 628/DEL/2023[2015-16]Status: DisposedITAT Delhi23 Aug 2023AY 2015-16

Bench: Sh. G.S.Pannu, Hon’Ble & Sh. Anubhav Sharmashalini Gupta Vs. Acit, Habsburger Str 7, Circle Int. Tax 1(3)(1) Duesseldorf 4057, New Delhi Germany 999999 Pan : Bnrpg7735F (Appellant) (Respondent)

Section 139Section 147Section 69

made during the year to Unitech Ltd., the Assessing Officer has added a sum of Rs. 74,12,618/- as unexplained investment u/s 69 of the Income Tax Act alleging that in the confirmation from Mr. Munish Bhatia the date mentioned is 15th of May 2014 while ... Assessing Officer grossly erred in law and on facts in adding a sum of Rs.74,12,618/- as unexplained investment u/s 69 of the Act by mismatching of dates in customer ledger account of assessee in the books of M/S Unitech Ltd and the confirmation of Mr. Manish Bhatia

Seemaratan Hasrajani, Jaipur vs. ITO Ward-1(1), Jaipur

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

ITA 348/JPR/2023[2010-11]Status: DisposedITAT Jaipur23 Aug 2023AY 2010-11

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

For Appellant: NoneFor Respondent: Shri Anup Singh, Addl. CIT-DR

Section 144Section 159Section 195

facts and circumstances of the case the ld. CIT(A) is not justified in sustaining the addition of Rs.77,52,656/- towards alleged unexplained investment to Mutual Fund Units as held and assessed by the AO. 2 SMT. SEEMA RATAN HASRANI VS ITO, WARD 1(1), JAIPUR 2. Under ... other alternative but to add a sum of Rs. 77,52,656/- into the total income of the assessee for tax purposes, being unexplained investment, as no justification for source of such investment was submitted by the assessee despite providing ample opportunities to her. 6. Apart from above

Giridhar Jadhao, Raipur vs. Deputy Commissioner of Income Tax, Circle-2(1), Raipur

In the result, appeal of the assessee is allowed in terms of our observations herein above

ITA 90/RPR/2023[2013-14]Status: DisposedITAT Raipur22 Aug 2023AY 2013-14

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.90/Rpr/2023 निर्धारण वर्ष /Assessment Year: 2013-14 Giridhar Jadhao Vs Dy. Cit F-60, Shri Ram Vatika Circle 2(1), Raipur (C.G.) Near Ram Mandir, Teacher Colony, Kota Raipur-492 001 Pan No. :Acjpj 7367A (अपीलार्थी /Appellant) (प्रत्यर्थी / Respondent) .. निर्धारितीती की ओर से /Assessee By : Shri R.B. Doshi, Ca राजस्व की ओर से /Revenue By : Shri Satya Prakash Sharma, Sr. Dr सुनवाई ाई की तारीख / Date Of Hearing : 17/08/2023 घोषणाणा की तारीख/Date Of Pronouncement : 22 /08/2023 आदेश / O R D E R Per Arun Khodpia, Am : The Captioned Appeal Of The Assessee Is Directed Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi, Dated 24.01.2023 For The Assessment Year 2013-14, Which Emerged Against The Order Of The Ld. Ao Vide Order U/S 144 Of The It Act Dated 28.03.2016. The Grounds Of Appeal Raised By The Assessee Are As Under: “1. Ld. Cit (Appeals) Has Erred In Sustaining Addition Of Rs.21,41,188/- On Account Of Unexplained Investment U/S 69B Of The Act On Account Of Transaction In The Securities, On Reference Under Cib Transaction Under The Code 502 Of National & Multi Commodity Exchange Contract Of Rs.10 Lacs Or More Without Considering Our Submissions. 2. The Impugned Addition Made By The Ld. Ao Is Bad In Law, Illegal, Unjustified, Contrary To Facts & Law & Based Upon Recording Of Incorrect Facts & Finding, In Violation Of Principles Of Natural Justice & The Same Should Have Been Quashed By The Ld. Cit (Appeals).

For Appellant: Shri R.B. Doshi, CAFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 144Section 69B

appeal raised by the assessee are as under: “1. Ld. CIT (Appeals) has erred in sustaining addition of Rs.21,41,188/- on account of unexplained investment u/s 69B of the Act on account of transaction in the securities, on reference under CIB transaction under the code 502 of National

Bhargav Bharatbhai Pandya, Surat vs. Income Tax Office, Ward 2(1)(3), Surat

In the result, ground No

ITA 354/SRT/2022[2018-19]Status: DisposedITAT Surat22 Aug 2023AY 2018-19

Bench: Shri Pawan Singh(Physical Hearing) Bhargav Bharatbhai Pandya, I.T.O., 61, Shubham Row House, Near Ward-2(1)(3), Vs. Sarasswati School, Honey Park Surat. Road, Adajan, Surat-395009. Pan No. Bcwpp 1537 L Appellant/ Assessee Respondent/ Revenue

Section 254(1)Section 56(2)(x)Section 68

from third party being interest free loan. On such view, the ld. CIT(A) directed the assessing officer to treat the addition as unexplained investment under section 69A. Further aggrieved, the assessee has filed present appeal before the Tribunal. 7. I have heard the submissions of the learned Authorised Representative ... without issuing any show cause notice, directed the Assessing Officer to make addition under Section 69A of the Act as unexplained investment. The ld. AR of the assessee submits that the change of nature of addition is not permissible in absence of any show cause notice when the assessee

Hasmukhbhai B. Patel HUF, Mumbai vs. CIT(Appeals), NFAC, Delhi

In the result, appeals for the assessment years 2014-15 and 2015-16

ITA 703/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Aug 2023AY 2015-16

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Neelkanth a/wFor Respondent: Shri Rajesh Meshram

Section 10(38)Section 143(3)Section 234BSection 250Section 271(1)(c)Section 68

section 147 of the Act made the addition of the entire consideration of Rs.1,10,00,000, under section 69 of the Act as unexplained investment. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue. Aggrieved, the assessee is in appeal before ... regarding the nature and source of the investment is found to be not satisfactory, the value of the investment can be treated as an unexplained investment under section 69 of the Act. However, in the present case, no such allegation has been raised by the Revenue. Thus the addition made

Shri Harjot Singh, Gurdaspur vs. Principal Commissioner of Income Tax ( Central ), Ludhaiana

In the result, appeal of the assessee ITA No

ITA 130/ASR/2023[2018-19]Status: DisposedITAT Amritsar21 Aug 2023AY 2018-19

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

Section 133ASection 139(1)Section 143Section 143(3)Section 263Section 44A

Rs.34,70,000/-. Also the surrendered income of Rs.15,11,555/- was shown in P&L account which should have been separately shown as unexplained investment. ii) Professional income should have been computed u/s.44ADA and audit report in Form 3CD was required to be filed with return but not filed ... business premises and on account of construction of the residential house which cannot be business receipts and should have been offered separately as unexplained investments. But it is observed that same has been shown as receipts and total income of Rs.7,32,083/- has been shown including surrender amount

Shri Surjit Singh, Nawanshahr vs. Income Tax Officer, Nawanshahr

In the result, all the appeals of the assessee ITA No

ITA 91/ASR/2022[2000-01]Status: DisposedITAT Amritsar21 Aug 2023AY 2000-01

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjeei.T.A. Nos. 89 To 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01

Section 143(3)Section 147Section 148Section 250

justice. 5. That the ld.CIT(A) further committed grave legal error in sustaining the addition of Rs. 16,87,180/- for the alleged unexplained investment in land, even in disregard to the order of Hon’ble Punjab & Haryana High Court in the case of one Jagtar Singh, already followed

Shri Surjit Singh, Nawanshahar vs. Income Tax Officer, Nawanshahar

In the result, all the appeals of the assessee ITA No

ITA 90/ASR/2022[1999-2000]Status: DisposedITAT Amritsar21 Aug 2023AY 1999-2000

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjeei.T.A. Nos. 89 To 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01

Section 143(3)Section 147Section 148Section 250

Shri Navraj Singh S/O Shri. Surjit Singh, Nawanshahar vs. Income Tax Officer, Nawanshahar

In the result, all the appeals of the assessee ITA No

ITA 89/ASR/2022[2000-01]Status: DisposedITAT Amritsar21 Aug 2023AY 2000-01

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjeei.T.A. Nos. 89 To 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01

Section 143(3)Section 147Section 148Section 250

DCIT, Central Circle - 3, Surat vs. Shiri Ashesh Nanalal Doshi, Surat

In the result, the appeal of the revenue for AY 2016-17 is also dismissed

ITA 32/SRT/2021[2016-17]Status: DisposedITAT Surat21 Aug 2023AY 2016-17

Bench: Shri Pawan Singh & Dr. Arjun Lal Sainiit(Ss)A No. 07/Srt /2021 (Assessment Year: 2015-16)

Section 132Section 143(2)Section 153CSection 254(1)

erred in treating the MOU in question as dumb document and deleting the addition made of Rs.55,00,000/- on account of unexplained investment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the incriminating documents seized

Om Prakash Bishu, Kuchaman City vs. DCIT, Jodhpur

In the result, appeal of the assessee is allowed

ITA 107/JODH/2022[2019-20]Status: DisposedITAT Jodhpur18 Aug 2023AY 2019-20

Section 115BSection 133ASection 142ASection 142A(4)Section 143(2)Section 143(3)Section 2Section 69B

case the ld. AO has erred on facts and in law in making addition of Rs.3,32,34,038/- on account of unexplained investment u/s 69B of the Act in construction of the Hospital Building, on the basis of Valuation Report of the DVO obtained u/s 142A ... accordingly. 3. The ld. AO has erred on facts and in law in making addition of Rs.3,32,34,038/- as unexplained investment u/s 69B on the basis of report of the DVO dated 15.06.2021 which is itself bad in law as the DVO has not provided an opportunity

Madan Mohan Sharma, Meerut vs. ITO, Ward- 1(4), Meerut

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

ITA 2829/DEL/2018[2014-15]Status: DisposedITAT Delhi18 Aug 2023AY 2014-15

Bench: Shri C.M. Garg & Shri M. Balaganeshassessment Year: 2014-15 Late Madan Mohan Sharma, Vs Ito, Through Legal Heir Shri Ankit Sharma, Ward-1(5), 27, Nehru Road, Faridabad. Meerut. Pan: Awkps0546H

For Appellant: Shri Sankalp Malik &For Respondent: Ms Raja Rajeshwari R., Sr. DR

Section 115BSection 133(6)Section 142(1)Section 143(3)Section 68

assessee, the ld. AO erroneously considered the sale of flat in Raj Nagar Extension in Ghaziabad for Rs.35,31,000/- as an unexplained investment made by the assessee on account of purchase transaction thereof in the assessment. This fact was clarified by the ld.CIT(A) that a sum of Rs.35 ... same cannot be accepted and directed the ld. AO to compute short- term capital gains again after giving direction to delete the unexplained investment in the sum of Rs.35.31 lakhs. 5 7. At the outset, we find that the return filed by the assessee was selected for limited scrutiny only

Bhagyaarma Gem & Jewellery Private Limited, Raipur vs. Income Tax Officer, Ward 4(1), Raipur

In the result, the appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 250/RPR/2019[2014-15]Status: DisposedITAT Raipur18 Aug 2023AY 2014-15

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No. 250/Rpr/2019 "नधा"रण वष" / Assessment Year : 2014-15 Bhagyaarna Gems & Jewellery Pvt. Ltd. G.B Plaza, Sadar Bazar, Raipur-492 001 (C.G.) Pan : Aaect0981A .......अपीलाथ" / Appellant बनाम / V/S. The Income Tax Officer, Ward-4(1), Raipur. ……""यथ" / Respondent

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Shri Choudhary N.C. Roy, Sr. DR

Section 124(1)Section 127Section 131Section 133ASection 143(2)Section 143(3)

conducted on the assessee company on 11.10.2023. No books of account were found in the course of the survey proceedings. Survey officials came across unexplained investment aggregating to Rs.1.10 crore, as under: 1. Unexplained investment in stock : Rs.1,00,00,000/- 2. Unexplained investment as franchisee fees ... Unexplained investment in furniture :Rs. 7,00,000/- Total : Rs.1,10,00,000 Also, cash in hand of Rs.4,73,000/- was found during the survey proceedings. 6 Bhagyaarna Gems & Jewellery Pvt. Ltd. Vs. ITO, Ward-4(1) 8. Statements of the directors of the assessee company, viz. Shri Haresh

Yesha Dhirajlal Thakrar, Rajkot vs. The DCIT, NFAC Delhi, Delhi

In the result, appeal of the assessee in ITA no

ITA 75/RJT/2023[2013-14]Status: HeardITAT Rajkot18 Aug 2023AY 2013-14

Bench: Ld. Cit(A) From Penalty Order Dated 29.01.2022 (Din: Itba/Pnl/F/271(1)(B)/2021-22/1039193062(1)) Passed By Ld. Assessing Officer,Nfac, Delhi(Hereinafter Called “The Ao”) U/S 271(1)(B) Of The 1961 Act Levying Penalty Of Rs. 30,000/- Against The Assesse For Non Compliance Of Three Notices Dated 27.07.2021, 06.08.2021 & 16.08.2021 Issued During Reassessment Proceedings , All Three Aforesaid Notices U/S 142(1) Of The 1961 Act. The Proceedings Were Conducted Before Division Bench Through E-Court Through Virtual Hearing Mode.

For Appellant: Shri R D Lalchandani,AdvocateFor Respondent: Shri. A.K.Pandey, Sr. DR

Section 142(1)Section 144Section 144BSection 147Section 148Section 250Section 271(1)(b)Section 271BSection 56(2)(vii)

making an addition of Rs. 1,90,50,000/- against the assessee u/s 56(2)(vii) of the 1961 Act as an unexplained investment. The AO also initiated penalty proceedings against the assessee u/s 271(1)(b) of the 1961 Act, which culminated into an ex- parte penalty order dated

Mp Ferrous and Non Ferrous India Pvt Ltd, Ahmedabad vs. DCIT, Cir-7(2)(2), Mumbai

In the result, the appeal by the assessee is allowed

ITA 1249/MUM/2023[2010-11]Status: DisposedITAT Mumbai17 Aug 2023AY 2010-11

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Yeshwant Gupta a/wFor Respondent: Shri Prashant Barate

Section 143(1)Section 143(3)Section 147Section 148Section 250Section 69

erred in upholding the addition of treating the unsecured loan as unexplained expenditure & also making addition u/s 69 of the IT Act as unexplained investment. 4. On the facts and circumstances of the case, the Learned Assessing Officer erred by making addition of unsecured loan notwithstanding the fact that interest