“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

Manishkumar Jadulal Thakkar, Rajkot vs. ITO Ward (1) (1), RKT, It-Office, New Aayakar Bhawan, Vatiaka, Rajkot

In the result, the appeal of the assessee is partly allowed, in above terms

ITA 12/RJT/2026[2012-13]Status: HeardITAT Rajkot16 Jan 2026AY 2012-13

Bench: Dr. Arjun Lal Sainiआयकरअपीलसं./Ita No. 12/Rjt/2026 ("नधा"रणवष"/Assessment Year: (2012-13) Manishkumar Jadulal Thakkar The Ito, Wd-(1)(1) Rajin Infrastructure Shivam Park Sn 3, New Aayakar Bhavan, Vatiaka, Vs. Corner 150Ft Ring Road, Nr. Nagrik Rajkot-360001 Bank, Nr. Raiya Telephone Exchange, Rajkot – 360005 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Adbpt5491J (अपीलाथ"/Assessee) (""यथ"/Respondent)

For Appellant: Shri Suresh Tejwani, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 131Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

amount of Rs. 13,00,000/- utilised for giving unsecured loan to Shri Deep Maheshbhai Vithlani was treated, by the assessing officer, as unexplained investment of the assessee within the meaning of section 69 of the Act and added to his total income for A.Y. 2012-13. Further, assessing officer

Lal Babu Prasad, Siwan vs. ACIT, Circle-2, Muzaffarpur

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

ITA 317/PAT/2025[2015-16]Status: DisposedITAT Patna16 Jan 2026AY 2015-16

Bench: SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER SHRI SONJOY SARMA (Judicial Member)

Section 133ASection 250Section 43B

over and above the normal profit. However, the Assessing Officer further treated the closing stock of ₹43,49,933 (out of total discrepancy) as unexplained investment in stock and added the same to the total income of the assessee. 4. Further, on perusal of the tax audit report, sundry creditors

Santosh Bai Bhatevra, Jhabua vs. ITO Ward -1, Ratlam

In the result, the impugned order partly allowing the first

ITA 519/IND/2025[2017-18]Status: DisposedITAT Indore16 Jan 2026AY 2017-18

Bench: Shri B.M. Biyani & Shri Paresh M Joshisantosh Bai Bhatevra, Ito Ward-1, बनाम/ 1, Rupkheda, Ranapur, Ratlam. Vs. Jhabua, Ratlam.(M.P) (Pan: Asqpb6129D) (Appellant) (Respondent) Assessee By Shri Shrawan Gupta, Adv. Revenue By Shri Ashish Porwal, Sr.Dr Date Of Hearing 08.01.2026 Date Of Pronouncement 16.01.2026 आदेश/ O R D E R

Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 250Section 253Section 69A

Rs.3.73,000/- out of Rs.7.78,000/- made by the Id. AO u/s 69A on account of cash deposited in the bank account as alleged unexplained investment u/s 69A, also erred in ignoring the other material, evidence and facts available on record and erred in not considering fully in their true ... made by the Ld. AO u/s 69A on account of cash deposited in the bank account as alleged unexplained investment. The addition so sustained are not legally tenable. It was submitted that total addition in the “Impugned Assessment order” was Rs. 7,78,000/- out of which

Radheshyam Agarwal, Bhopal vs. The PCIT, Central, Bhopal

ITA 417/IND/2025[2018-19]Status: DisposedITAT Indore16 Jan 2026AY 2018-19

Bench: Shri B.M. Biyani & Shri Paresh M Joshi

Section 115BSection 133ASection 143(2)Section 147Section 148Section 148ASection 253Section 263

gold and silver ornaments found at the time of survey and incorporated by the assessee in his books may not be considered as unexplained investment u/s 69 and may not please be taxed u/s 115BBE of the Act. 8.2 Reply of the assessee is perused and considered but not found ... discussed above, it is evident that unexplained money of Rs.49,82,740/-(οι 740/-(on account of interest income earned in earlier year) and unexplained investment in stock of Rs.23,02,233/- was surrendered by the assessee at the time of survey proceedings. Therefore, the same is attracted the deeming

Annie Hemendrakumar Khatri, Ahmedabad vs. The ITO, Ward-3(2)(1), Ahmedabad

In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose

ITA 2315/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad16 Jan 2026AY 2012-13

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T. R. Senthil Kumar (Judicial Member)

Section 132(4)Section 143(1)Section 144Section 148Section 250

assessee by Speed Post. The assessee did not replied to the notices, which has resulted in passing exparte assessment order by making following addition: Unexplained investment in property of Rs.77,08,500 STCG from sale of property Rs. 35,50,000 Unexplained cash deposit in bank ... grievously erred in law and or on facts in upholding the additions aggregating to Rs. 1,18,79,000/- as under: a) Unexplained investment in property Rs. 77,08,500/- b) STCG on sale of property Rs. 35,50,000/- c) Unexplained cash deposit in bank

Vishal Sharma, Faridabad vs. DCIT, Dehradun

Appeal is allowed for statistical purposes

ITA 217/DDN/2025[2018 - 19]Status: DisposedITAT Dehradun15 Jan 2026

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwalita No. 217/Ddn/2025 : Asstt. Year: 2018-19 Sh. Vishal Sharma, Vs Dcit, House No. 1783, Sector 23-A, Central Circle, Faridabad, Haryana-121005 Dehradun (Appellant) (Respondent) Pan No. Gahps1914N Assessee By : Ms. Monika Ghai, Adv. & Sh. Sharad Agarwal, Adv. Revenue By : Ms. Poonam Sharma, Cit-Dr Date Of Hearing: 15.01.2026 Date Of Pronouncement: 15.01.2026 Order Per Satbeer Singh Godara: This Assessee’S Appeal For Assessment Year 2018-19, Arises Against The Cit(A)-3, Noida’S Din & Order No. Itba/Apl/M/250/2025-26/10795387488(1) Dated 12.08.2025, In Proceedings U/S 143(3) Of The Income Tax Act, 1961. 2. Heard Both The Parties At Length. Case File Perused.

For Appellant: Ms. Monika Ghai, Adv. &For Respondent: Ms. Poonam Sharma, CIT-DR

Section 143(3)

counsel raises his first and foremost argument that both the lower authorities herein have erred in law and on facts in adding the alleged unexplained investment of Rs.12,78,000/- in his hands based on the seized material found in the premises of M/s Crypto Secure Solutions

Johar Gadly Alias Zohar Mohammad Bhai Through Legal Heir Rashida Gadly, Patna vs. ACIT, Circle-2, Patna

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

ITA 295/PAT/2025[2017-18]Status: DisposedITAT Patna15 Jan 2026AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.295/Pat/2025 Assessment Year: 2017-18 Johar Gadly Alias Zohar Mohammad Bhai ……………....Appellant Shop No.5, Aditya Arcade, Exhibition Road, Patna, Bihar- 800001. [Pan: Abopb7542H] Vs. Acit, Cc-2, Patna………….…..……………..………………….…..... Respondent Appearances By: Shri Hiresh Karan, Adv. Appeared On Behalf Of The Appellant. Shri Manab Advak, Jcit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 13, 2026 Date Of Pronouncing The Order : January 15, 2026 आदेश / Order Per Sonjoy Sarma: The Present Appeal Filed By The Assessee Is Directed Against The Order Dated 31.01.2025 Passed By The Cit(A)-3, Patna U/S 250 Of The Income Tax Act, 1961 (The ‘Act’) For The Assessment Year 2017-18. 2. Brief Facts Of The Case Are That The Assessee Filed Return Of Income Declaring A Total Income Of ₹2,94,100. The Assessing Officer Completed Assessment U/S 143(3) By Determining Total Income At Rs.8,63,000/- After Making Addition Of Rs.11,57,190/- On Account Of Unexplained Investment U/S 69 Of The Act.

Section 143(3)Section 250Section 69

Officer completed assessment u/s 143(3) by determining total income at Rs.8,63,000/- after making addition of Rs.11,57,190/- on account of unexplained investment u/s 69 of the Act. I.T.A. No.295/Pat/2025 Johar Gadly Alias Zohar Mohammad Bhai 3. Aggrieved by the assessment order, the assessee preferred an appeal

Income Tax Officer, Nahan vs. Ram Swroop, Sangrah

In the result, both the above appeals of the Revenue are allowed for statistical purposes

ITA 1216/CHANDI/2024[2013-14]Status: DisposedITAT Chandigarh15 Jan 2026AY 2013-14

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Sachin Doger, CA (Virtual Mode)For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR

restored. 4. Briefly, the facts of the case are that the assessment was completed by the Assessing Officer by making additions on account of unexplained investments in Fixed Deposit Receipts (FDRs). 5. Aggrieved by the said assessment order, the assessee preferred an appeal before the Ld. CIT(A). 6. During

Income Tax Officer, Nahan vs. Ram Swroop, Sangrah

In the result, both the above appeals of the Revenue are allowed for statistical purposes

ITA 1215/CHANDI/2024[2013-14]Status: DisposedITAT Chandigarh15 Jan 2026AY 2013-14

Bench: the Ld. CIT(A).

For Appellant: Shri Sachin Doger, CA (Virtual Mode)For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR

Assistant Commissioner of Income Tax, Central Circle, Patiala vs. Satguru Foundation(Regd), Muktsar

In the result, all the four appeals are dismissed

ITA 494/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh15 Jan 2026AY 2013-14

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita Nos. 491, 493 & 494/Chd/2023 "नधा"रण वष" / A.Y. : 2010-11, 2012-13 & 2013-14 The Acit, M/S Satguru Foundation (Regd.), Central Circle, Vs Desh Bhagat College & Hospital, Patiala. Kotkapura Road, Muktsar. "थायी लेखा सं./Pan No: Aabas1418A अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ Ita No. 492/Chd/2023 "नधा"रण वष" / A.Y. : 2011-12 The Acit, M/S Satguru Foundation (Regd.), Patiala. Vs Desh Bhagat College & Hospital, Kotkapura Road, Muktsar. "थायी लेखा सं./Pan No: Aabas1418A अपीलाथ"/Appellant ""यथ"/Respondent

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Abhishekl Pal Garg, CIT DR

Section 147

corroborated by bringing on record documentary evidence to establish the chain of cash flow cycle and relevant transaction on the entry alleged to be unexplained investment in properties or cash transaction. Since, the AO/the Ld. CIT (A)and the Ld. DR failed to disprove the contention of the appellant ... premises of the foundation, during the course of the Survey U/s 133A did belong to the appellants and that the transaction entered therein are unexplained investment being either made in the properties were out of books of accounts or other tangible or intangible Assets. In view of that matter

Asstt. Commissioner of Income Tax, Patiala vs. Satguru Foundation(Regd.), Muktsar

In the result, all the four appeals are dismissed

ITA 493/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh15 Jan 2026AY 2012-13

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Abhishekl Pal Garg, CIT DR

Section 147

Assistant Commissioner of Income Tax, Patiala vs. Satguru Foundation(Regd), Muktsar

In the result, all the four appeals are dismissed

ITA 492/CHANDI/2023[2011-12]Status: DisposedITAT Chandigarh15 Jan 2026AY 2011-12

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Abhishekl Pal Garg, CIT DR

Section 147

Assisstant Commissioner of Income Tax, Patiala vs. Satguru Foundation(Regd)., Muktsar

In the result, all the four appeals are dismissed

ITA 491/CHANDI/2023[2010-11]Status: DisposedITAT Chandigarh15 Jan 2026AY 2010-11

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Abhishekl Pal Garg, CIT DR

Section 147

Rajiv Goyal, Patiala, Punjab vs. Jao ITO Ward-3, Patiala

In the result, the appeal filed by the assessee is allowed

ITA 481/CHANDI/2025[2018-19]Status: DisposedITAT Chandigarh14 Jan 2026AY 2018-19

Bench: the CIT(A) have not been considered properly.

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR (Virtual Mode)

Section 115BSection 68Section 69

erred in confirming the order of the Assessing Officer, wherein, the addition of Rs. 1,01,38,817/- have been made as unexplained investment and has also erred in charging the same u/s 115BBEof the Act. 2. That the Ld. CIT(A) has erred in confirming the following additions ... documentary evidences furnished by the assessee. 2 4. That the treatment of such amount, which have been utilized for purchasing of immoveable property as unexplained investment u/s 69 is against the facts and circumstances of the case and, further, the treatment of such sum as unexplained investment

Krishnamurthy Pandy, Thanjavur vs. ITO, Ward-1, Thanjavur

In the result, the appeal filed by the assessee stands allowed

ITA 2560/CHNY/2025[2017-18]Status: DisposedITAT Chennai14 Jan 2026AY 2017-18

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Shri. R. Santhanu, C.AFor Respondent: Ms. Gouthami Manivasagam, J.C.I.T

Section 115BSection 133(6)Section 142(1)Section 143(2)Section 143(3)Section 69A

Revenue to make addition u/s.69 or 69A of the Act. Because, the mandate of the provisions of Section 69 & 69A of the Act, i.e., unexplained investments and unexplained money etc., may be deemed to be the income of the assessee for the financial year relevant to assessment year concerned ... investment, needs to be examined. In case the assessee explains the nature and source of investment, then the question of making addition towards unexplained investment u/s. 69 of the Act does not arise. In this case, the source of deposits has not been disputed and has been created

Sangeeta Sharma, Ghaziabad, Up vs. Income Tax Officer, Ghaziabad

In the result, assessee’s appeal is allowed

ITA 5635/DEL/2025[2013-14]Status: DisposedITAT Delhi14 Jan 2026AY 2013-14

Bench: Ms. Madhumita Royassessment Year: 2013-14

Section 144Section 147Section 148Section 148(1)Section 151Section 69

assessee has challenged the addition of Rs. 13,67,786/- made under Section 69 of the Act on account of unexplained investment. The assessee, a 2 salaried employee, purchased innova car; source of purchase of the same is the subject matter before the Tribunal. 3. The assessee has raised

R.N. Khemka Enterprises (P) Ltd., Delhi vs. ITO, Ward- 20(3), New Delhi

In the result, assessee’s appeal is allowed

ITA 6016/DEL/2018[2007-08]Status: DisposedITAT Delhi14 Jan 2026AY 2007-08

Bench: Ms. Madhumita Roy & Shri Amitabh Shuklaassessment Year: 2007-08

Section 133(6)Section 139Section 143(3)Section 147Section 148Section 151

paper work to give the transactions a white face and reassessment was finalized upon making addition of Rs. 3,34,31,000/- as unexplained investment of the assessee out of undisclosed source of income being routed through such bogus accommodation 4 entries. The same was further confirmed by the First

Deputy Commissioner of Income Tax, Central Circle, Dehradun vs. Om Prakash Gupta, Dehradun

Appeal of the assessee is allowed

ITA 160/DDN/2025[2023-24]Status: DisposedITAT Dehradun13 Jan 2026AY 2023-24

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwalita No. 160/Ddn/2025 : Asstt. Year: 2023-24 Dcit, Vs Om Prakash Gupta, Central Circle, 19/A, Raj Vihar, Dehradun-2488001 Dehradun-248001 (Appellant) (Respondent) Pan No. Abipg9323M Assessee By : Sh. S. K. Matta, Ca Revenue By : Ms. Poonam Sharma, Cit-Dr Date Of Hearing: 13.01.2026 Date Of Pronouncement: 13.01.2026 Order Per Satbeer Singh Godara: This Revenue’S Appeal For Assessment Year 2023-24, Arises Against The Cit(A)-3, Noida’S Din & Order No. Itba/Apl/M/250/2025-26/1076723333(1) Dated 04.06.2025, In Proceedings U/S 143(3) Of The Income Tax Act, 1961. 2. Heard Both The Parties At Length. Case File Perused.

For Appellant: Sh. S. K. Matta, CAFor Respondent: Ms. Poonam Sharma, CIT-DR

Section 143(3)

Next comes the second substantive issue between the parties regarding correctness of the CIT(A)’s action partly upholding the assessment findings making unexplained investment addition of Rs.1,40,00,000/- to the extent of Rs.57,97,400/- in the lower appellate discussion. 5 Om Prakash Gupta 6. Both

Manju Yadav, Indore vs. ITO-1(2), Indore

The appeal of the assessee is allowed

ITA 469/IND/2025[2016-17]Status: DisposedITAT Indore13 Jan 2026AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Bhagirath Mal Biyani

For Appellant: Respondent byFor Respondent: Shri Ashish Porwal, Sr. DR

Section 142(1)Section 144Section 147Section 271(1)(b)

notice within the prescribed time and, therefore, the assessment was framed ex parte by making additions on account of alleged unexplained cash deposits and unexplained investment in immovable property. Simultaneously, the Assessing Officer also initiated penalty proceedings under section 271(1)(b) of the Act for non-compliance

Deputy Commissioner of Income Tax, Indore vs. Ferro Concrete Con India Pvt. Ltd., Indore

Appeal is allowed for statistical purpose

ITA 111/IND/2025[2019-20]Status: DisposedITAT Indore13 Jan 2026AY 2019-20

Bench: Shri Siddhartha Nautiyal & Shri B.M. Biyaniassessment Year:2019-20 Deputy Commissioner Of Ferro Concrete Con India Income-Tax Pvt. Ltd., बनाम/ 3/5/7B, Bhagirathpura Vs. Indore (Assessee/Appellant) (Revenue/Respondent) Pan: Aaacf2726K Revenueby Shri Ashish Porwal, Sr. Dr Assessee By Shri Venus Rawka, Ar Date Of Hearing 17.12.2025 Date Of Pronouncement 13.01.2026

Section 115BSection 139Section 143(2)Section 147Section 148Section 69

made by AO on account of bogus purchases as there is no delivery of goods and the same disallowed as unexplained investment u/s 69 and brought to tax. 3. The appellant craves leave to add to or deduct from or otherwise amend the above grounds of appeal.” 2. The background ... that the AO has not made any independent enquiry for reopening of assessment. 6.2.1 Insofar as impugned disallowance of Rs. 84,76,000/- as unexplained investment u/s 69 of the Income Tax Act 1961 is concerned, it is clear that reopening of assessment of Appellant was done merely