“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

Bani Medical Enterprises, Amritsar vs. Principal Commisioner of Income Tax -1, Amritsar

In the result, appeal of the assessee is allowed

ITA 78/ASR/2022[2017-18]Status: DisposedITAT Amritsar07 Jul 2023AY 2017-18

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

Section 142(1)Section 143Section 143(2)Section 143(3)Section 263

extracted as below: - I.T.A. No. 78/Asr/2022 10 Assessment Year: 2017-18 “Section 69, read with section 263, of the Income-tax Act, 1961 -Unexplained investments (Unsecured loans) - Assessment year 2013-14 – Assesseecompany had received unsecured loans from two different companies - Commissioner noting that said loans were shown as investment

Shri Harbans Singh Mann, Mansa vs. Income Tax Officer Ward-1 (4), Mansa

In the result, the ground no

ITA 129/ASR/2022[2010-10]Status: DisposedITAT Amritsar07 Jul 2023AY 2010-10

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjeei.T.A. No.129/Asr/2022 Assessment Year: 2010-11

Section 147Section 148Section 151Section 250oSection 69A

amount of Rs.39,05,000/- is unexplained to the department. In view of the provisions ofsection 69A of the Income Tax Act, 1961, the unexplained investment of Rs.39,05,000/- is deemed to be income of the assessee for the Financial Year 2009-10from undisclosed sources and the same

ITO, Ward- 16(1), New Delhi vs. Mahadev Dairy Pvt. Ltd., New Delhi

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

ITA 4380/DEL/2018[2012-13]Status: DisposedITAT Delhi07 Jul 2023AY 2012-13

Bench: Sh. N. K. Billaiya & Ms. Astha Chandraassessment Year: 2017-18 Ito Mahadev Dairy Pvt. Ltd. Ward- 16 (1) Vs C-16, 101 First Floor, New Delhi Gurunanak Pura, Laxmi Nagar, Delhi -110092 Pan No.Aahcm1300K (Appellant) (Respondent)

Section 133(6)Section 250(4)Section 36(1)Section 68

circle rate fixed for this property was Rs.17583000/-. Since the circle rate was higher than the transactions rate the AO treated Rs.1226410/- as unexplained investment and made the impugned addition. 20. The assessee agitated the matter before the CIT(A) and contended that section 50C is not applicable

Rukshana Begum, Ghaziabad vs. ITO, Ward- 2(2), Ghaziabad

In the result, appeal of the assessee is partly allowed

ITA 3814/DEL/2018[2008-09]Status: DisposedITAT Delhi07 Jul 2023AY 2008-09

Bench: Shri C.M. Gargrukshana Begum, Vs. Ito, W/O. Shri Khalid, R/O. Ward-2(2), 1059, Church Gali, Kaila Ghaziabad Bhatta, Ghaziabad (Appellant) (Respondent) Pan: Aeepf0220A

For Appellant: Ms. Hasneeta Matta, CAFor Respondent: Shri Om Parkash, Sr. DR

Section 148Section 50C

sacred task for affording financial security/financial independence, to his wife in her old age and it cannot be regarded as a "sin" or unexplained investment. 9. That in doings so, the Ld. CIT(A), erred in law, on facts and in surrounding circumstances in holding, the entire investment ... bias task in complete financial security and financial independence to his wife in her old age and it cannot be regarded as sin or unexplained investment. The ld AR vehemently submitted that the ld CIT(A) has also erred in holding that the entire investment

M/S. Champion Agro Ltd., Sapar (Veraval), Rajkot-Gujarat vs. The Deputy Comissioner of Income Tax, Circle-1(1), Rajkot-Gujarat

In the result, all the three appeals filed by the Assessee are hereby dismissed

ITA 46/RJT/2018[2013-14]Status: HeardITAT Rajkot07 Jul 2023AY 2013-14

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

Section 133ASection 144Section 271(1)(c)

however assessee did not cooperate and even did not file any reply. Therefore, considering the material on record, the AO made addition as unexplained investment. Even before the learned CIT(A) also the assessee was non cooperative. Number of opportunities were given to the assessee to represent his case, however ... proceeded further with the appeal ex parte and decided the appeal on merits and confirmed the order passed by the AO confirming additions of unexplained investment. Thus, even learned CIT(A) also decided the matter on merits. On going through the orders passed by the AO as well as learned

M/S. Champion Agro Ltd., Sapar (Veraval), Rajkot-Gujarat vs. The Deputy Comissioner of Income Tax, Circle-1(1), Rajkot-Gujarat

In the result, all the three appeals filed by the Assessee are hereby dismissed

ITA 45/RJT/2018[2013-14]Status: HeardITAT Rajkot07 Jul 2023AY 2013-14

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

Section 133ASection 144Section 271(1)(c)

M/S. Champion Agro Ltd., Sapar (Veraval), Rajkot-Gujarat vs. The Deputy Comissioner of Income Tax, Circle-1(1), Rajkot-Gujarat

In the result, all the three appeals filed by the Assessee are hereby dismissed

ITA 44/RJT/2018[2011-12]Status: HeardITAT Rajkot07 Jul 2023AY 2011-12

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

Section 133ASection 144Section 271(1)(c)

ITO, Ward-3(3)(1), Surat vs. Shri Arvindbhai Ratanbhai Mokani, Surat

In the result, this appeal of the revenue is dismissed

ITA 139/SRT/2020[2011-12]Status: DisposedITAT Surat06 Jul 2023AY 2011-12

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini(Physical Hearing) I.T.O., Arvindbhai Ratanbhai Mokani, Ward-3(3)(1), D-260-261, Vittal Nagar Society, Vs. Surat. Varachha Road, Hira Baug, Surat-395006. Pan No. Ahfpm 2302 K Appellant/ Assessee Respondent/ Revenue

Section 144Section 254(1)

long term capital gain (LTCG). 15. On the other additions on account of Rs.2.73 crores and Rs.1.49 crores on account of unexplained investment, the Ld. CIT(A) on considering the submission of assessee and contents of assessment order recorded that Assessing officer made addition on the basis of CIB Information

The Income Tax Officer-Ward-2, Gandhidham - Kutch vs. M/S. Riddhi Siddhi Jewellers, Gandhidham - Kutch

In the result, appeal of the Revenue isdismissed

ITA 239/RJT/2018[2014-15]Status: HeardITAT Rajkot05 Jul 2023AY 2014-15

Bench: Smt.Annapurna Gupta & Smt. Madhumita Royassessment Year :2014-15 Ito, Ward-2 Vs. M/S.Riddhi Siddhi Jewellers Gandhidham. Shop No.1, Plot No.68 Bba (Sough) Gandhidham-Kutch. 0 अपीलाथ"/ (Appellant) "" यथ"/(Respondent) Assessee By : Shri D.M. Rindani, Ar Revenue By : Shri B.D. Gupta, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 11/04/2023 घोषणा क" तार"ख /Date Of Pronouncement: 05/07/2023

For Appellant: Shri D.M. Rindani, ARFor Respondent: Shri B.D. Gupta, Sr.DR

Section 133ASection 250(6)Section 40Section 69ASection 69C

ld.counsel for the assessee, on the otherhand, has pointed to us that the ld.CIT(A) has rightly taken note of the fact that thealleged unexplained investment of the assessee pertained to the excess stock of assets in which the assessee dealt in the course of its business i.e. of bullion ... details of such clandestine activities were found during survey. This is quite natural that no sale/purchase invoices will be found in respect of such unexplained investment in the stock, which had to disclosure by the appellant during the survey. Now the A.O.’s argument is that the appellant had failed

Income Tax Officer, Ward-I, Bhilai vs. Shri Rajendra Shivhare, Bhilai

In the result, appeal of the revenue is dismissed in terms of our aforesaid observations

ITA 222/RPR/2011[2005-06]Status: DisposedITAT Raipur04 Jul 2023AY 2005-06

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.222/Rpr/2011 "नधा"रण वष" / Assessment Year : 2005-06 The Income Tax Officer-I, Bhilai (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. Shri Rajendra Shivhare, Gram- Ban Barad, Post & Thana-Nandini Nagar, Distt. Durg (C.G.)-490 036 Pan : Acgpj3748N ……""यथ" / Respondent

For Appellant: NoneFor Respondent: Shri Piyush Tripathi, Sr. DR

Section 144Section 69

circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.17,50,000/- made by the AO on account of unexplained investment in immovable properties u/s.69 of the I.T. Act, 1961" 2. "Whether in law and on facts & circumstances of the case ... erred in deleting the addition of Rs.17,67,600/- made by the AO on account of unexplained investment in movable properties u/s. 69 of the I.T. Act, 1961" 3. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition

Simple Singh, Meerut vs. ITO, Ward-2(5), Meerut

Appeal are allowed for statistical purposes

ITA 1961/DEL/2022[2011-12]Status: DisposedITAT Delhi30 Jun 2023AY 2011-12

Bench: Shri Kul Bharat

Section 144Section 148Section 69

However, no explanation was given by the assessee. Therefore, the AO made addition of Rs. 37,35,000/- u/s 69 of the Act being unexplained investment. Hence, the AO assessed income at Rs. 45,50,650/-. Aggrieved against this the assessee preferred appeal before learned CIT(Appeals), who also dismissed ... disclosed assets relating to immovable property. He submitted that the ITR was uploaded to the government portal, hence it is not a case of unexplained investment. 5. On the other hand, learned DR submitted that all these objections were taken before the learned CIT(Appeals) who has considered and even

Rajendra Shankar Singhal, New Delhi vs. ITO, Ward-28(2), New Delhi

In the result, appeal of the Assessee is partly allowed

ITA 1400/DEL/2021[2015-16]Status: DisposedITAT Delhi30 Jun 2023AY 2015-16

Bench: Shri Kul Bharat & Shri M. Balaganesh

earned thereon also remained unexplained and out of the books of account. While upholding the addition, due care has been taken with regard to unexplained investment towards purchases made by the appellant for which no separate addition has been made on this account. It is worthwhile to mention here that

JCIT (OSD), Central Circle-1, Noida vs. Nm Buildwell Pvt Ltd, Noida

ITA 994/DEL/2019[2012-13]Status: DisposedITAT Delhi30 Jun 2023AY 2012-13

Bench: Sh. G.S.Pannu, Hon’Ble & Sh. Anubhav Sharma

Section 132Section 139Section 142(1)Section 143(2)Section 153C

account of unexplained investment, unexplained cash credit, and income from other sources. Aggrieved, appellant is in appeal before me. 3. M/s. N.M Buildwell Pvt. Ltd. is a Private incorporated on 13" Dec. 2007. It is classified as Non-govt Company and is registered at Registrar of ITA No. 994/Del/2019 ... 13/10/2016 to make compliance and furnish the details as called for.” 5. The A.O made additions of income from other sources and cash credit, unexplained investment and unexplained cash credits, however, the Id. First Appellate Authority allowed the appeal of the assessee observing the AO has not discussed any incriminating

Finquest Financial Solutions Pvt Ltd, Mumbai vs. DCIT, CC-3(4), Mumbai

In the result, both the appeals of the assessee for AY

ITA 734/MUM/2023[2017-18]Status: DisposedITAT Mumbai28 Jun 2023AY 2017-18

Bench: Shri Aby T. Varkey, Jm & Ms. Padmavathy S, Am आयकर अपील सं/ I.T.A. No.733/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2018-19) आयकर अपील सं/ I.T.A. No.734/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2017-18) Finquest Financial Solutions बिधम/ Deputy Commissioner Of Pvt. Ltd. Income Tax, Cc-3(4), Vs. 602, 6Th Floor, Boston Room No.1915, 19Th House, Suren Road, Floor, Air India Building, Andheri (E), Nariman Point, Mumbai-400 093 Mumbai-400 021 स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacf8117G (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri V. G. Ginde & Kumar Kale Revenue By: Shri Ankush Kapoor, Cit-Dr सुनवाई की तारीख / Date Of Hearing: 07/06/2023 घोषणा की तारीख /Date Of Pronouncement: 28/06/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax Appeals-51, Mumbai [Hereinafter Referred To As The “Ld. Cit(A)”] Dated 16.01.2023, For Ay. 2018-19 & Ay. 2017-18 Respectively. 2. As Per The Request Of The Ld. Authorized Representative (Ar) Of The Assessee, First Of All, We Will Adjudicate The Appeal For Ay. 2018-19 First. 3. At The Outset, The Ld. Ar Does Not Press Ground No. 1 Which Is Against The Action Of The Ld. Cit(A) Confirming The Addition Of Rs.19,25,000/- Made By The Assessing Officer (Ao), Being Disallowance Of Fees Paid To The Roc. Therefore, This Ground Of Appeal Of Assessee Stands Dismissed. (Ay. 2018-19 & Ay. 2017-18) Finquest Financial Solutions Pvt. Ltd.

For Appellant: Shri V. G. Ginde & Kumar KaleFor Respondent: Shri Ankush Kapoor, CIT-DR

Section 132Section 143(3)Section 153ASection 69B

made by the AO for AY. 2015-16 u/s 143(3) of the Act, of Rs.4,48,68,500/- u/s 69B of the Act (unexplained investment) in respect of purchase of immovable properties (forty 40 flats of “Sriniwas Residency”) has crystalized, enhanced cost of acquisition should be granted to assessee ... Rs.7.10 Crores whereas, the sale-deed reflected the purchase consideration to be Rs.11.59 Crores. So, AO added the difference of Rs.4.48 Crores as unexplained investment in the hands of assessee. And thereafter it is noted that assessee accepted the action of AO and opted for the amnesty scheme under Vivad

Finquest Financial Solutions Pvt Ltd, Mumbai vs. DCIT, CC-3(4), Mumbai

In the result, both the appeals of the assessee for AY

ITA 733/MUM/2023[2018-19]Status: DisposedITAT Mumbai28 Jun 2023AY 2018-19

For Appellant: Shri V. G. Ginde & Kumar KaleFor Respondent: Shri Ankush Kapoor, CIT-DR

Section 132Section 143(3)Section 153ASection 69B

Omm Shree Realcon Pvt. Ltd, Bhubaneswar vs. Pr.CIT-1, Bhubaneswar

In the result, appeal of the assessee stands allowed

ITA 97/CTK/2023[2018-19]Status: DisposedITAT Cuttack28 Jun 2023AY 2018-19

Bench: Before S/Shri George Mathan, Judicial & And Rajesh Kumarassessment Year : 2018-19 Om Shree Realcon Pvt Ltd., Om Shree Realcon Pvt Ltd., Vs. Pr. Cit- Bhubaneswar Bhubaneswar-1 Plot No.418, Forest Park, 8, Forest Park, Bhubaneswar. Bhubaneswar. Pan/Gir No. Pan/Gir No.Aabco 3118 P (Appellant (Appellant) .. ( Respondent Respondent) Assessee By : Shri S.K.Sarangi, Ca S.K.Sarangi, Ca Revenue By : Shri M.K.Gautam, Pr. Cit (Osd) Pr. Cit (Osd) Date Of Hearing : 28 /0 06/2023 Date Of Pronouncement : 28 /0 /06/2023 O R D E R Per Bench

For Appellant: Shri S.K.Sarangi, CAFor Respondent: Shri M.K.Gautam, Pr. CIT (OSD)

Section 143(3)Section 2(22)(e)Section 263Section 68

assessed in that case in the hands of the shareholder and not in the hands of the recipient company. 13. Coming to the alleged unexplained investments, the Pr. CIT himself having accepted the factum of the loans from three companies and the Director for the purpose of proposing the addition

ACIT, CC-14, New Delhi vs. Pramaditya, Rajasthan

In the result, the appeal of the revenue is dismissed and cross objection of the assessee is allowed

ITA 1861/DEL/2021[2017-18]Status: DisposedITAT Delhi27 Jun 2023AY 2017-18

Bench: Shri Saktijit Dey & Shri M. Balaganeshassessment Year: 2017-18 Acit, Vs Pramaditya, Cc-14, 67, Mahaveer Nagar, 2Nd Maharani Farm, New Delhi. Durgapur, Jaipur, Rajasthan – 302018. Pan: Ajppp2281E Co No.29/Del/2022 Assessment Year: 2017-18 Pramaditya, Vs. Acit, 67, Mahaveer Nagar, Cc-14, 2Nd Maharani Farm, New Delhi. Durgapur, Jaipur, Rajasthan – 302018. Pan: Ajppp2281E

For Appellant: Shri Hiren Mehta, CAFor Respondent: Ms Sapna Bhatia, CIT, DR

Section 127Section 132Section 143(3)Section 153CSection 69A

assessee. 4.4. The ld. AO however completely disregarded all the aforesaid contentions and proceeded to add a sum of Rs 1.65 crores towards unexplained investment using unaccounted demonetized cash into gold bullion through Shri Purushottam Lal Soni u/s 69A of the Act and taxed the same at a higher rate

Shri Umang Ashokbhai Sundhiya, Surat vs. Income Tax Officer, Ward - 1(3)(9), Surat

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

ITA 225/SRT/2023[2017-18]Status: DisposedITAT Surat26 Jun 2023AY 2017-18

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.225/Srt/2023 Assessment Year: (2017-18) (Physical Hearing) Shri Umang Ashokbhai Sundhiya, Vs. The Ito, Ward-1(3)(9), 33, 1St Floor, Sneh Smruti Society, Surat. Opp. Dhanmora Complex, Adajan Patia, Surat – 395009. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Bypps8397J (Assessee) (Respondent) Assessee By Shri Akshay M. Modi, Ca Shri Vinod Kumar, Sr. Dr Respondent By Date Of Hearing 15/06/2023 Date Of Pronouncement 26/06/2023

Section 139(1)Section 142(1)Section 144Section 44A

during the demonetization period and other credit entries of Rs.1,21,19,841/-, the AO treated the same as unexplained income u/s 69A and unexplained investment u/s 69 of the Act respectively. Accordingly, total addition of Rs.1,29,75,840/- (Rs.8,56,000/- u/s 69 and Rs.1

Tara Raju Patel, Valsad vs. Income Tax Officer, International Taxation, Surat

In the result, the appeal of assessee is allowed

ITA 195/SRT/2023[2012-13]Status: DisposedITAT Surat26 Jun 2023AY 2012-13

Bench: Shri Pawan Singh(Virtual Hearing) Raju Maganlal Patel, I.T.O. C/O-Dinkarbhai T. Patel, Shankar (International Taxation), Vs. Talao, Via-Dungri, Valsad. Surat. Pan No. Auspp 1436 F Appellant/ Assessee Respondent/ Revenue Tara Raju Patel, I.T.O. C/O-Dinkarbhai T. Patel, Shankar (International Taxation), Vs. Talao, Via-Dungri, Valsad. Surat. Pan No. Avdpp 6714 G Appellant/ Assessee Respondent/ Revenue

Section 133(6)Section 144Section 147Section 148Section 254(1)Section 69

erred in law and on facts to uphold AO’s addition u/s 69 of the Act for Rs. 10,50,500/- being unexplained investment in form of cash deposits in saving bank account No. 31/0602920 with the Central Bank of India during F.Y. 2010-11 relevant

Shri Raju Maganlal Patel, Valsad vs. Income Tax Officer, Int. Taxation, Surat

In the result, the appeal of assessee is allowed

ITA 188/SRT/2023[2011-12]Status: DisposedITAT Surat26 Jun 2023AY 2011-12

Section 133(6)Section 144Section 147Section 148Section 254(1)Section 69