“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

Golchha Uttam Kumar, Hyderabad vs. DCIT., Central Circle-3(2), Hyderabad

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

ITA 817/HYD/2025[2019-20]Status: DisposedITAT Hyderabad07 Jan 2026AY 2019-20

Bench: Shri Ravish Sood & Shri Madhusudan Sawdia

For Appellant: Shri S. Rama Rao, Advocate

Section 133ASection 143(2)Section 143(3)Section 69A

inaccurate physical stock counting by the staff. In the absence of supporting evidence, the Ld. AO treated the excess stock as unexplained investment and added the same to the income of the assessee. Accordingly, the Ld. AO completed the assessment under section 143(3) of the Act dated 27.09.2021 making ... additions of Rs.40,00,000/- on account of unexplained cash credit and Rs.7,88,943/- on account of unexplained investment in stock, thereby assessing the total income of the assessee at Rs.1,37,81,643/-. 4. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before

Mrl Trading Company, Hyderabad vs. ITO., Ward-7(1), Hyderabad

ITA 29/HYD/2025[2017-18]Status: DisposedITAT Hyderabad07 Jan 2026AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G.आ.अपी.सं / Ita No.29/Hyd/2025

For Appellant: CA A SrinivasFor Respondent: MS Kritika Jaiswal, Sr. AR

Section 143(3)Section 69A

demonetized currency from 09.11.2016 to 30.12.2016 and received demonetized currency of Rs.57.29 crores, which was added by AO u/s.69 of the Act as unexplained investment. 26 ITA.No.29/Hyd./2025 Admittedly, the amount of Rs.57.29 crores is received by assessee on account of sale of liquor as no contrary evidence ... IMFS and beer to the customers and accepted demonetized currency in return is to be assessed u/s.69 of the Act or not as unexplained investment. The Id. Senior DR has raised a question on this that when there was an express bar by Government on transacting business from

Sanghi Textiles Private Limited, Hyderbad vs. ITO., Ward-3(1), Hyderabad

ITA 1311/HYD/2025[2014-15]Status: DisposedITAT Hyderabad07 Jan 2026AY 2014-15

Bench: Us:

Section 139(1)Section 143(2)Section 145Section 147Section 148Section 194ASection 250Section 37(1)

come forth with any explanation regarding the source of the subject investment, therefore, the AO added the same by treating it as its unexplained investment under section 69B of the Act. 8. Further, the AO observed that as the assessee company had failed to furnish the requisite details in respect ... appellant. The additions broadly relate to: (i) profit estimation on contractual receipts as per Form 26AS, (ii) addition of interest income u/s 194A, (iii) unexplained investments u/s 69B, and (iv) ad-hoc disallowance of business expenses due to non-verification. The appellant has raised several grounds disputing the validity

Subodh Adhikary, Kolkata vs. ITO, Ward 51(1), Kolkata

Appeal of the assessee is allowed

ITA 669/KOL/2024[2015-16]Status: DisposedITAT Kolkata07 Jan 2026AY 2015-16

Bench: SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY (Judicial Member)

Section 142(1)Section 143(2)Section 250Section 56(2)(vii)

Ground No. 4 and Rs. 2,84,88,545/-, in Ground No. 5 and 6 in respect of unexplained investment are concerned, the same were without jurisdiction as the AO has no authority under the Act to initiate the enquiry and call for record/explanation from the assessee on that date

Income Tax Officer(E) Ward- 2(4), New Delhi, Civic Centre New Delhi vs. Prakash Sewa Trust, Paschim Vihar

ITA 4305/DEL/2024[2016-17]Status: DisposedITAT Delhi07 Jan 2026AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwal

Section 11Section 12ASection 143(3)

impugned Order the assessing authority has simply made additions in the returned income without stating whether it is a case of cash credit, unexplained investments, unexplained money, amount of investment, etc. not fully disclosed in books of account, unexplained expenditure, etc. The impugned Order is therefore without authority ... taxed is 'income of the Petitioner and whether the addition is sought to be made on account of Cash Credit (Section 68), Unexplained Investments (Section 69), Unexplained Money (Section 69A), Amount of Investment, etc., not fully disclosed in books of account (Section 69B), Unexplained Expenditure, etc. (Section 69C). The requirement

Neetal Relan, New Delhi vs. ACIT, Central Circle-14, New Delhi

In the result, both the appeal of the assessee in ITA No

ITA 3038/DEL/2023[2018-19]Status: DisposedITAT Delhi07 Jan 2026AY 2018-19

Bench: Shri Sudhir Kumar & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 153CSection 250

case there is dispute with the partners and the papers prepared / written by the other partners does not prove the transactions of so called unexplained Investment are real or honest. ITA No.3037 & 3038/Del/2023 Neetal Relan Vs ACIT 11. That on the facts and circumstances of the case and provisions ... Section 69A. The CIT(A) is not sure as to whether the amount is unexplained expenditure or ITA No.3037 & 3038/Del/2023 Neetal Relan Vs ACIT unexplained investment. The addition confirmed on the basis of summaries and conjunctions is requested to be deleted. 15. That on the facts and circumstances

Neetal Relan, New Delhi vs. ACIT, Central Circle-14, New Delhi

In the result, both the appeal of the assessee in ITA No

ITA 3037/DEL/2023[2017-18]Status: DisposedITAT Delhi07 Jan 2026AY 2017-18

Bench: Shri Sudhir Kumar & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 153CSection 250

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

In the result, appeal of the assessee in ITA No

ITA 585/RPR/2025[2019-20]Status: DisposedITAT Raipur06 Jan 2026AY 2019-20

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita Nos.584 & 585/Rpr/2025 "नधा"रण वष" /Assessment Years : 2018-19 & 2019-20 Anil Kumar Jain 34, Maruti Life Style, Ravi Shankar University, S.O, Raipur-492 010 Pan: Ahypj7657H .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax (Central), Bilaspur (C.G.)

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 144Section 145(3)Section 153ASection 3

persuasive value, however, a closer scrutiny of the same leads us to the conclusion that the said decision was rendered in the context of unexplained investments as per the scheme of Section 69 of the Act. In Paradise Holidays, the issue pertained to the rejection of books of account without

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

In the result, appeal of the assessee in ITA No

ITA 584/RPR/2025[2018-19]Status: DisposedITAT Raipur06 Jan 2026AY 2018-19

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 144Section 145(3)Section 153ASection 3

M/S Anjeneya Ispat Ltd., Saraikela vs. Deputy Commissione of Income Tax, Circele-1, Jamshedpur

In the result, the appeal of the assessee is allowed

ITA 75/RAN/2022[2009-10]Status: DisposedITAT Ranchi06 Jan 2026AY 2009-10

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.75/Ran/2022 Assessment Year: 2009-10 M/S Anjeneya Ispat Ltd.…………….…….…............................……….……Appellant 29, Rain Basera, Sanjay Nagar Colony, Adityapur, Saraikela, Jharkhand- 831013. [Pan: Aagca1031N] Vs. Dcit, Circle-1, Jamshedpur.….....…..…..….........……........……...…..…..Respondent Appearances By: Shri Devesh Poddar, Adv., Appeared On Behalf Of The Appellant. Shri Kanhaiya Lal Kanak, Cit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 18, 2025 Date Of Pronouncing The Order : January 06, 2026 Order Per Sonjoy Sarma: This Appeal Filed By The Assessee Is Directed Against The Order Of The Cit(A), Jamshedpur (Hereinafter Referred To As “Cit(A)”) Dated 25.09.2017 Passed Under Section 250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”). 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For The Assessment Year 2019–20 Declaring A Total Income Of ₹62,64,116. The Case Was Selected For Complete Scrutiny. During The Relevant Previous Year, A Survey Operation Under Section 133A Of The Income-Tax Act, 1961 Was Conducted At The Business Premises Of The Assessee On 16.02.2019. Subsequently, Statutory Notices Under Sections 143(2) & 142(1) Of The Act Were Issued. In Response Thereto, The Assessee Appeared From Time To Time & Furnished Various Details & Documents As Called For. The Same Were Examined & Discussed By The Assessing Officer During The Course Of Assessment Proceedings. During

Section 10(23)Section 133ASection 133A(3)Section 145ASection 14ASection 250Section 40Section 69Section 69C

Assessing Officer, however, treated the statement as an admission of undisclosed investment and added the entire amount of ₹1,07,26,895 as unexplained investment under section 69 of the Act. During physical verification of cash, a difference of ₹4,08,000 was found as compared to the cash balance ... also observed that tax was not deducted at source on the said payment. The Assessing Officer further made the following additions: 1. Unexplained investment of ₹17,70,410 under section 69, as the assessee failed to produce supporting evidence. I.T.A. No.75/Ran/2022 M/s Anjeneya Ispat Ltd 2. Unutilized CENVAT

Preeti Milan Sankhala, Pune vs. ITO Ward 14(3), Pune

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

ITA 939/PUN/2025[2017-18]Status: DisposedITAT Pune06 Jan 2026AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.939/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Suhas P. BoraFor Respondent: Shri Manish Sinha

Section 131Section 133ASection 144BSection 147Section 148Section 151ASection 69C

Ld.CIT(A) has erred in confirming the action of the Ld. AO making the addition of Rs.15,00,000/- on account of unexplained investment in purchase of the flat merely relying on the information 2 Preeti Milan Sankhala received from the office of DCIT-C-14, Pune and without bringing ... first time. But so far as merits of the case are concerned the same relates to addition of ₹15.00 lakh on account of unexplained investment in purchase of flat and he submitted that no opportunity of cross examination has been provided nor the copy of statement of the third person

Arundhati Dnyandeo Kalane, Ahilyanagar vs. ITO, Ward-1, Ahilyanagar

In the result, the appeal filed by the assessee is partly allowed as per the terms indicated above

ITA 623/PUN/2025[2013-14]Status: DisposedITAT Pune06 Jan 2026AY 2013-14

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.623/Pun/2025 Assessment Year : 2013-14

For Appellant: Shri Prasad BhandariFor Respondent: Shri Bharat Andhale

Section 147Section 250Section 69

course of search at Nandan Group and based on such information appearing in such seized material he concluded that the assessee has made unexplained investment in cash at Rs.40.00 lakh, unexplained investment through cheque at Rs.30.70 lakh and unexplained investment for Stamp Duty at Rs.3,62,600/- towards the purchase ... before us. Addition of Rs.73,62,600/- made by the ld. Assessing Officer in the hands of assessee u/s.69 of the Act for the unexplained investment in purchase of flat from Nandan Associates. The alleged addition constitutes the addition for unexplained investment in cash at Rs.40.00 lakh 6 Arundhati Dnyandeo

Income Tax Officer, Dhule vs. Santosh Jaynarayan Sharma, Dhule

In the result, the appeal filed by the Revenue is dismissed whereas the Cross Objection filed by the assessee is partly allowed

ITA 2324/PUN/2025[2017-18]Status: DisposedITAT Pune06 Jan 2026AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.2324/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Sanjay DhivareFor Respondent: Shri Chinmayy Suhas

Section 133(6)Section 145(3)Section 147Section 148Section 148ASection 151Section 69

separate estimation was reasonable 4. The learned CIT(A) erred in deleting the addition of ₹49,00,000/- made u/s.69 r.w.s.115BBE in respect of unexplained investment in immovable property, ignoring that the assessee had failed to furnish any explanation or evidence for the source of funds during the assessment proceedings

Shri Ajinkya Mahadev Kanchan, Pune vs. ITO Ward-43(3), Pune

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

ITA 1675/PUN/2025[2014-15]Status: DisposedITAT Pune06 Jan 2026AY 2014-15

Bench: SHRI MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri B. C. Malakar &For Respondent: Shri Bharat Andhale

Section 250Section 250(6)

income includes addition of Rs.61,30,280/- u/s 56(2)(vii) of the IT Act and addition of Rs.76,00,000/- on account of unexplained investments and also an addition of Rs.2,74,94,181/- on account of capital gain on development/joint venture agreement. 5 5. Being aggrieved with

Kulsum Aaqib Memon, Mumbai vs. DCIT, C. Circle 4(2), Mumbai

In the result, the appeal of the assessee being ITA No

ITA 6540/MUM/2025[2021-22]Status: DisposedITAT Mumbai06 Jan 2026AY 2021-22

Bench: Shri Anikesh Banerjee & Shri Bijayananda Prusethkulsum Aaqib Memon, Vs The Deputy Commissioner Of 1201, Park View, 25 Mehraj Income Tax, Central Circle 4(2), Sethi Marg, Agripada, Mumbai Mumbai-400008 Kautilya Bhawan, G Block Bkc, Bandra Kurla Complex, Mumbai Pan: Cbypm9748Q 400051 Appellant Respondent Assessee By : Shri Rakesh Joshi, Respondent By : Shri Ritesh Misra (Cit Dr) Date Of Hearing : 16/12/2025 Date Of Pronouncement : 06/01/2026 O R D E R Per: Anikesh Banerjee (Jm): 1. The Instant Appeal Of The Assessee Filed Against The Order Of The Ld. Commissioner Of Income Tax (Appeal)-52, Mumbai [For Brevity The “Ld. Cit(A)”], Order Passed Under Section 250 Of The Income Tax Act 1961 (For Brevity ‘The Act’) For Assessment Year 2021-22, Date Of Order 13.09.2025. The Impugned Order Emanated From The Order Of The Ld. Deputy Commissioner Of Income Tax, C.C.-4(2)

For Appellant: Shri Rakesh JoshiFor Respondent: Shri Ritesh Misra (CIT DR)

Section 132Section 143(3)Section 153CSection 250Section 69

issue) show cause notice dt. 18.03.2024, the assessee was asked to explain as to why the following amounts should not be treated as an unexplained investment under section 69 and treated for tax accordingly. 8.In response to the above show cause notice the assessee submits that she had not paid

Deepak Kakubhai Mehta, Mumbai vs. DCIT, Central Circle 4(1), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 6511/MUM/2025[2018-19]Status: DisposedITAT Mumbai06 Jan 2026AY 2018-19

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 1Section 132Section 132(4)Section 133ASection 143(3)Section 153ASection 153CSection 153DSection 30Section 56

passed, the Assessing Officer made various additions, primarily on account of: • alleged cash loans advanced to Shri Nilesh Bharani / Evergreen Enterprises, treated as unexplained investment under section 69 of the Act; • notional interest computed thereon and brought to tax under section 56 of the Act; and • for Assessment Year ... statements, when read in their entirety and in proper context, do not reflect any clear, categorical, or unambiguous admission of undisclosed income or unexplained investment by the assessee. On the contrary, the statements consistently reflect uncertainty, lack of immediate recollection, and a request for time to verify records. 19.1. Based

Deepak Kakubhai Mehta, Mumbai vs. DCIT, Central Circle 4(1), Mumbai

ITA 6510/MUM/2025[2017-18]Status: DisposedITAT Mumbai06 Jan 2026AY 2017-18

Section 1Section 132Section 132(4)Section 133ASection 143(3)Section 153ASection 153CSection 153DSection 30Section 56

Deepak Kakubhai Mehta, Mumbai vs. DCIT, Central Circle 4(1), Mumbai

ITA 6509/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Jan 2026AY 2016-17

Section 1Section 132Section 132(4)Section 133ASection 143(3)Section 153ASection 153CSection 153DSection 30Section 56

Deepak Kakubhai Mehta, Mumbai vs. DCIT, Central Circle 4(1), Mumbai

In the result, all the appeals filed by the assessee are allowed

ITA 6508/MUM/2025[2015-16]Status: DisposedITAT Mumbai06 Jan 2026AY 2015-16

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 1Section 132Section 132(4)Section 133ASection 143(3)Section 153ASection 153CSection 153DSection 30Section 56

Deepak Kakubhai Mehta, Mumbai vs. DCIT, Central Circle 4(1), Mumbai

ITA 6507/MUM/2025[2014-15]Status: DisposedITAT Mumbai06 Jan 2026AY 2014-15

Section 1Section 132Section 132(4)Section 133ASection 143(3)Section 153ASection 153CSection 153DSection 56Section 69

passed, the Assessing Officer made various additions, primarily on account of: alleged cash loans advanced to Shri Nilesh Bharani / Evergreen Enterprises, treated as unexplained investment under section 69 of the Act; notional interest computed thereon and brought to tax under section 56 of the Act; and for Assessment Year ... statements, when read in their entirety and in proper context, do not reflect any clear, categorical, or unambiguous admission of undisclosed income or unexplained investment by the assessee. On the contrary, the statements consistently reflect uncertainty, lack of immediate recollection, and a request for time to verify records. 19.1. Based