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“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

Loreal India Pvt. Ltd, Mumbai vs. Addl/Jt/Dy/ACIT/ITO/NFAC, Delhi

In the result, the appeal filed by the assessee for AY 2016-17 is treated as partly allowed

ITA 802/MUM/2022[2017-18]Status: DisposedITAT Mumbai29 Jun 2022AY 2017-18
Section 143(3)Section 144CSection 92C

assessing officer while passing the draft assessment order on 28th December 2018 treated the goodwill recorded by assessee is at ₹ 8.27 crore as an unexplained investment under section 69 of the Act. The assessing officer also took his view that amount of current liabilities and expenses payable by Rahul Healthcare

Dy CIT-Circle-22(1), Mumbai vs. Mr Jamil Ahmed Quireshi, Mumbai

ITA 1202/MUM/2021[2010-11]Status: DisposedITAT Mumbai29 Jun 2022AY 2010-11

Bench: Shri M Balaganesh & Pavan Kumar Gadaledcit, Circle – 22(1), Vs. Mr. Jamil Ahmed Room No. 322, 3Rd Floor, Qureshi Piramal Chambers, Lal 102, Emerland Baug, Parel, Apartment, Near Dadar Mumbai-400012. Shakari Bank, Santacruz (W), Mumbai – 400055. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabpq1063C Appellant .. Respondent Appellant By : Shri S.N.Kabra.Dr Respondent By : Shri Dhaval Jariwala.Ar Date Of Hearing 23.05.2022 Date Of Pronouncement 23.06.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Revenue Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals) -32 Mumbai Passed U/S 143(3) & 250 Of The Income Tax Act, 1961. The Revenue Has Raised The Following Grounds Of Appeal.

For Appellant: Shri S.N.Kabra.DRFor Respondent: Shri Dhaval Jariwala.AR
Section 131Section 133ASection 143(1)Section 143(2)Section 143(3)Section 69C

respect of purchase of plots and failed to explain the sources from bank account the A.O. has observed that the assessee has made unexplained investments in the properties and made addition u/s 69C of the Act of Rs. 1,40,78,000/- which is over and above the total income ... accounts of M/s. Bagrodia Group of Companies Conclusion: Hence, the fact remains that the purchase of the plots of land was nothing but unexplained investment of the assessee Shri Jamil Ahmed Qureshi. Hence addition us 69C of the Act of Rs 1,40,78,000 made by the Assessing Officer

L' Oreal India P. Ltd., Mumbai vs. National E-Assessment Centre/ Dy CIT-Circle-7(1)(1), Mumbai

In the result, the appeal filed by the assessee for AY 2016-17 is treated as partly allowed

ITA 1198/MUM/2021[2016-17]Status: DisposedITAT Mumbai29 Jun 2022AY 2016-17
Section 143(3)Section 144CSection 92C

assessing officer while passing the draft assessment order on 28th December 2018 treated the goodwill recorded by assessee is at ₹ 8.27 crore as an unexplained investment under section 69 of the Act. The assessing officer also took his view that amount of current liabilities and expenses payable by Rahul Healthcare

DCIT CC 3(2), Mumbai vs. M/S. Varad Vinayak Textiles P. Ltd., Mumbai

In the result, the present appeal is allowed

ITA 998/MUM/2020[2011-12]Status: DisposedITAT Mumbai29 Jun 2022AY 2011-12

Bench: Shri Prashant Maharishi & Pavan Kumar Gadaledcit, Cc-3(2) Vs. M/S. Varad Vinayak Central Range – 3 Textiles P Ltd., Room No. 1913, Air 605, Business Classic, India Bldg, Nariman Chincholi Bunder Rd., Point, Mumbai – Malad (W) 400021. Mumbai – 400064. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaccv1777G Appellant .. Respondent Appellant By : Shri. Achal Sharma. Cit Dr Respondent By : None Date Of Hearing 25.05.2022 Date Of Pronouncement 30.06.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Revenue Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals)-51, Mumbai Passed U/S 143(3) R.W.S 153A & 250 Of The Income Tax Act, 1961. The Revenue Has Raised The Following Grounds Of Appeal.

For Appellant: Shri. Achal Sharma. CIT DRFor Respondent: None
Section 143(1)Section 143(2)Section 143(3)Section 153ASection 69

being the unaccounted estimated commission @ 2.5% on the accommodation entry of the said investments also cannot be sustained considering that the protective addition of unexplained investments itself has been deleted. Accordingly, Ground Nos. 1 to 3 of the appeal are allowed. 6. In the result, the present appeal is allowed

Desirazu Sundara Siva Rao, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-6(3)(1), Bengaluru

In the result, appeals by the assessees are treated as partly allowed for statistical purposes and Stay Petition is dismissed

ITA 633/BANG/2021[2015-16]Status: DisposedITAT Bangalore24 Jun 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Ms. S.Padmavathi

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl. CIT(DR)(ITAT), Bengaluru
Section 54Section 54F

sale of the property. In that assessment, an addition of Rs.10 lakhs was made under section 69 of the Act on account of unexplained investment in the property and this was held to be beyond the scope of limited scrutiny and therefore the assessment was quashed. This case also stands

Nagaraj Desirazu, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-6(3)(1), Bangalore

In the result, appeals by the assessees are treated as partly allowed for statistical purposes and Stay Petition is dismissed

ITA 449/BANG/2021[2015-16]Status: DisposedITAT Bangalore24 Jun 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Ms. S.Padmavathi

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl. CIT(DR)(ITAT), Bengaluru
Section 54Section 54F

sale of the property. In that assessment, an addition of Rs.10 lakhs was made under section 69 of the Act on account of unexplained investment in the property and this was held to be beyond the scope of limited scrutiny and therefore the assessment was quashed. This case also stands

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 312/BANG/2020[2012-13]Status: DisposedITAT Bangalore24 Jun 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(4), Bangalore

ITA 311/BANG/2020[2011-12]Status: DisposedITAT Bangalore24 Jun 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle-1(4), Bangalore

ITA 310/BANG/2020[2010-11]Status: DisposedITAT Bangalore24 Jun 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 309/BANG/2020[2009-10]Status: DisposedITAT Bangalore24 Jun 2022AY 2009-10

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

K.G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 308/BANG/2020[2008-09]Status: DisposedITAT Bangalore24 Jun 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

K. G. Krishna, Bangalore vs. The Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

ITA 307/BANG/2020[2007-08]Status: DisposedITAT Bangalore24 Jun 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Suman Lunkar, A.RFor Respondent: Shri Pradeep Kumar, CIT(DR) (Written submissions) &
Section 153A

taxable income 3. Disallowance of expenditure claimed by assessee 5.67 disallowed on adhoc basis 4. Capital gain treated as business Income 1.60 5. Unexplained investment 200 253 Total 8.2. However, in this case there was a seized material to the addition made in respect of unexplained investment of Rs.2 crores ... lacs) 1 Disallowance of expenditure charged to P&L 6.97 Account on adhoc basis 2. Treatment of capital gain as business income 66.47 3. Unexplained investment 20 4. Unexplained cash credit 78.97 5. Total 172.42 10.1. The Ld. A.R. submitted that in this assessment year there is no seized material

Alibhai Safruddin Malik, Mumbai vs. ITO, WD 23(1)(1), Mumbai

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

ITA 320/MUM/2022[2010-11]Status: DisposedITAT Mumbai23 Jun 2022AY 2010-11

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyalalibhai Safruddin Malik Vs. Ito – 23(1)(1) 22 Sea Pebbles, Near Matru Mandir, Tardeo, Joggers Park, Carter Nana Chowk, Mumbai – Road, Bandra, Mumbai 400007. – 400050. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Azmpm7354A Appellant .. Respondent Appellant By : Mr.Shankar Balasubramaniam.Ar Respondent By : Ms.Kavita Kaushik.Dr Date Of Hearing 03.06.2022 Date Of Pronouncement 07.06.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of Cit(A) National Faceless Appeal Centre (Nfac), New Delhi Passed U/S 147 R.W.S 144 & 250 Of The Income Tax Act, 1961. The Assessee Has Raised The Following Grounds Of Appeal.

For Appellant: Mr.ShankarFor Respondent: Ms.Kavita Kaushik.DR
Section 133(6)Section 142(1)Section 144Section 147Section 148Section 68Section 69

notice and no explanations were filed. 3. The A.O. has applied the Best judgment assessment U/sec144 of the Act and made the addition of unexplained investments in time deposits in DCB bank u/s 69 of the Act of Rs. 39,75,000/-.The AO has issued notice

Ambaji Resources & Credit P. Ltd., Mumbai vs. ITO-3(1)(2), Mumbai

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

ITA 1390/MUM/2021[2007-08]Status: DisposedITAT Mumbai23 Jun 2022AY 2007-08

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyal

For Appellant: Shri.AK Tibrewal.ARFor Respondent: Shri.Pramod Nikalje.DR
Section 143(3)Section 147Section 148(2)Section 68Section 69

Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.90,000 made by the Assessing Officer u/s 69 of the Act alleging unexplained investment. 9. That the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.7,60,200 made by the Assessing Officer ... Mumbai Since there is difference in balance sheet figures and the ledger account submitted by the assessee. The A.O has treated Rs.90,000/-as unexplained investment u/s 69 of the Act. Further (iii) the assessee has disclosed the current liabilities on account of M/s Coral Environments Pvt Ltd and Visage

Mukesh S Jhangiani (HUF), Mumbai vs. ITO WD-24(2) (4), Mumbai

ITA 309/MUM/2021[2010-11]Status: DisposedITAT Mumbai21 Jun 2022AY 2010-11

Bench: Shri Baskaran Br & Shri Kuldip Singh

For Appellant: Ms. Dinkle Hariya, A.RFor Respondent: Shri Kanhiya Lal Kanak, D.R
Section 132(1)Section 144Section 147

erred in confirming the action of the A.O. in making addition of Rs.5,12,208/-, on the ground of being alleged unexplained investment in shares. 3.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for 3.4 Without

Mukesh S. Jhangiani, Mumbai vs. ITO Ward-24(2)(4), Mumbai

ITA 308/MUM/2021[2010-11]Status: DisposedITAT Mumbai21 Jun 2022AY 2010-11

Bench: Shri Baskaran Br & Shri Kuldip Singh

For Appellant: Ms. Dinkle Hariya, A.RFor Respondent: Shri Kanhiya Lal Kanak, D.R
Section 132(1)Section 144Section 147

erred in confirming the action of the A.O. in making addition of Rs.5,12,208/-, on the ground of being alleged unexplained investment in shares. 3.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for 3.4 Without

Mukesh S. Jhangliani (HUF), Mumbai vs. ITO Ward-24(2)(4), Mumbai

ITA 307/MUM/2021[2009-10]Status: DisposedITAT Mumbai21 Jun 2022AY 2009-10

Bench: Shri Baskaran Br & Shri Kuldip Singh

For Appellant: Ms. Dinkle Hariya, A.RFor Respondent: Shri Kanhiya Lal Kanak, D.R
Section 132(1)Section 144Section 147

erred in confirming the action of the A.O. in making addition of Rs.5,12,208/-, on the ground of being alleged unexplained investment in shares. 3.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for 3.4 Without

Mukesh S. Jhangiani (HUF), Mumbai vs. ITO Ward-24(2)(4), Mumbai

ITA 306/MUM/2021[2009-10]Status: DisposedITAT Mumbai21 Jun 2022AY 2009-10

Bench: Shri Baskaran Br & Shri Kuldip Singh

For Appellant: Ms. Dinkle Hariya, A.RFor Respondent: Shri Kanhiya Lal Kanak, D.R
Section 132(1)Section 144Section 147

erred in confirming the action of the A.O. in making addition of Rs.5,12,208/-, on the ground of being alleged unexplained investment in shares. 3.2 It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for 3.4 Without

Meena Kashiprasad Murarka, Maharashtra, Mumbai vs. CIT(Appeals), National Faceless Appeal Centre, NFAC, Delhi

In the result, appeal filed by the assessee is allowed

ITA 2032/MUM/2021[2012-13]Status: DisposedITAT Mumbai21 Jun 2022AY 2012-13

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blemeena Kashiprasad Murarka V. Cit (Appeals) B-310, Virwani Industrial Estate National Faceless Appeal Centre Off. W.E. Highway, Goregaon (E) Delhi Mumbai - 400063 Pan: Aacpm4932H (Appellant) (Respondent) Assessee By : Shri Ashok Bansal Department By : Shri Suresh Periasamy

For Appellant: Shri Ashok BansalFor Respondent: Shri Suresh Periasamy
Section 133(6)Section 142(1)Section 143(1)Section 143(3)Section 148Section 154Section 69Section 69C

addition made to Total Income of the Appellant u/s 143(3) of the Act to the tune of Rs 1,98,620/- being unexplained investment u/s 69 of the Income Tax Act,1961 on the plea that no details have been filed regarding this transaction which could establish the investment

Nilesh Sanap, Kalyan vs. DCIT, Central Circle-1, Thane

In the result, all the appeals filed by Smt Lata Sanap is treated as partly allowed

ITA 845/MUM/2020[2007-08]Status: DisposedITAT Mumbai21 Jun 2022AY 2007-08
Section 139Section 153ASection 153C

assessed investment of Rs.24,000/- made in land at CTS No.159. We notice that the AO had made addition of unexplained investment of Rs.3,24,000/-. The Ld CIT(A) has accepted the sources to the extent of Rs.3.00 lakhs from out of agricultural income. However, the assessee had declared ... income. Accordingly, we direct deletion of Rs.24,000/-. 11. We shall now take up the appeal filed for AY 2003-04. The AO assessed unexplained investment in KVPs to the extent of Rs.3,75,000/-. The assessee had declared interest income of Rs.30,000/- from KVPs