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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

ITO Ward - 18(3), New Delhi vs. Samkiksha Mahajan, New Delhi

ITA 347/DEL/2021[2005-06]Status: DisposedITAT Delhi16 Dec 2025AY 2005-06

Bench: Shri Mahavir Singh, Hon’Ble & Shri Krinwant Sahay, Hon’Ble

For Appellant: Sh. Salil Kapoor, Ms. Ananya KapoorFor Respondent: Ms. Monika Singh, CIT(DR)
Section 132Section 133(6)Section 139Section 153A

valuation prepared of this property at Rs. 10,53,00,000/-. The AO on the basis of valuation report treated this as unexplained investment amounting to Rs. 10,53,50,000/-. The Assessee before the CIT(A) and now before us, contended that this valuation report was sent ... Rs.15,75,850/- (Rs.40,75,850/- - Rs.25,00,000/- is liable to be added to the Income of the appellant u/s 69 as Unexplained Investment. Thus, the addition made by the AO is confirmed to the extent of Rs.15,75,850/- as against addition of Rs.10,53,50,000/- made

Aadarsh Surana, Chennai vs. Deputy Commissioner of Income Tax, Corporate Circle 1(1), Chennai

In the result, the appeal of the assessee is allowed

ITA 1840/CHNY/2025[2017-18]Status: DisposedITAT Chennai15 Dec 2025AY 2017-18
For Appellant: Shri. R.Venkata Raman, C.AFor Respondent: Shri. Shiva Srinivas, CIT
Section 142(1)Section 143(2)Section 143(3)Section 250Section 47Section 68

assessee's balance sheet, and the assessee failed to explain the source of such investment. The AO accordingly treated the said amount as unexplained investment u/s.69 of the Act. The AO also disallowed Rs.25,152/- u/s.14A of the Act. 14. The impugned assessment was thus completed u/s.143 ... following additions: - i. Unexplained cash credit u/s.68 of the Act on account of increase in capital amounting to Rs.115,26,13,606/-; ii. Unexplained investment u/s.69 of Rs.4,30,62,000/-; iii. Disallowance u/s.14A of Rs.25,152/-. 15. Aggrieved by the assessment order and the consequential additions, the assessee carried

Rajendra Sahu, Katni vs. Income Tax Officer-1, Katni

ITA 163/JAB/2023[2014-15]Status: DisposedITAT Jabalpur12 Dec 2025AY 2014-15

Bench: SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY (Accountant Member)

For Appellant: Sh. Rahul Bardia, C.AFor Respondent: Sh. N.M. Prasad, Sr. DR 1
Section 131Section 147Section 148Section 69

assessee and held that the payment of Rs. 88,52,740/- in the F.Y. 2012-13, relevant to the A.Y. 2013-14 was an unexplained investment made by the assessee under section 69 of the Act. He, therefore, added the same back to the income of the assessee. In this

Shri Subhash Kumar Aahi, Satna vs. Assistant Commissioner of Income Tax, Circle-Satna, Satna

In the result, the appeal is partly allowed

ITA 24/JAB/2019[2013-14]Status: DisposedITAT Jabalpur12 Dec 2025AY 2013-14

Bench: Shri Kul Bharatshri Nikhil Choudhary

For Respondent: Shri N.M. Prasad, Sr. DR 1
Section 143(3)Section 250

learned CIT(A)-1, Jabalpur was not justified in confirming the A.O. who made an addition of Rs. 14,22,456/-on account of unexplained investment on renovation of shop on the basis of DVO's report. The addition is based on conjectures and surmises, vague and not sustainable ... surrender because he could not explain it but subsequently, when he saw it along with counsels and accountants, he realized that there was no unexplained investment and, therefore, no requirement to surrender because the entire cost of purchase and renovation already stood recorded in his books. Furthermore, it was submitted

Ambarwadikar Infrasturcture Limited, Aurangabad vs. ITO, Ward-1(1), Aurangabad

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

ITA 1039/PUN/2025[2016-2017]Status: DisposedITAT Pune12 Dec 2025AY 2016-2017

Bench: Shri R. K. Panda & Ms. Astha Chandra

For Appellant: Dr. Prayag JhaFor Respondent: S/Shri Amol Khairnar, CIT-DR &
Section 147Section 148Section 271(1)(c)Section 43C

year, Rs.2,08,25,400/- on account of applicability of section 43CA of the Act and an amount of Rs.3,00,89,000/- being unexplained investment in immovable properties. 3. Since there was delay in filing of the appeal before the Ld. CIT(A) / NFAC by 219 days

Ambarwadikar Infrasturcture Limited, Aurangabad vs. ITO, Ward-1(1), Aurangabad

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

ITA 1038/PUN/2025[2016-2017]Status: DisposedITAT Pune12 Dec 2025AY 2016-2017

Bench: Shri R. K. Panda & Ms. Astha Chandra

For Appellant: Dr. Prayag JhaFor Respondent: S/Shri Amol Khairnar, CIT-DR &
Section 147Section 148Section 271(1)(c)Section 43C

year, Rs.2,08,25,400/- on account of applicability of section 43CA of the Act and an amount of Rs.3,00,89,000/- being unexplained investment in immovable properties. 3. Since there was delay in filing of the appeal before the Ld. CIT(A) / NFAC by 219 days

Avva Sitarama Rao, Hyderabad vs. DCIT., Central Circle- 2(4), Hyderabad

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

ITA 691/HYD/2025[2009-10]Status: DisposedITAT Hyderabad12 Dec 2025AY 2009-10

Bench: the Ld. CIT(A).

Section 132Section 142(1)Section 153A

search, completed the assessment and determined the total income at Rs. 16,59,20,952/- by making addition 3 Avva Sitarama Rao towards unexplained investment of Rs. 16 crores on the basis of an agreement of sale dated 23.03.2009. 3. Aggrieved by the assessment order, the assessee preferred appeal before ... Before the Ld. CIT(A), the assessee challenged the additions made by the A.O. towards unexplained investment on the ground that, the documents found during the course of search being agreement of sale dated 23.03.2009 is between Sri Swami Hathiramji Mutt and M/s. Billiyard Farms Pvt. Ltd., a company represented

Chandini Duvvuri, Hyderabad vs. ITO (Int Taxn)-1, Hyderabad

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

ITA 1432/HYD/2025[2015-16]Status: DisposedITAT Hyderabad12 Dec 2025AY 2015-16

Bench: SHRI VIJAY PAL RAO, HON’BLE (Vice President), SHRI MANJUNATHA G, HON’BLE (Accountant Member)

Section 147Section 148Section 148ASection 151A

reassessment ex-parte under Section 144 r.w.s. 147 of the Act, and treated (i) the time deposits of Rs. 55,98,000/- as unexplained investment under Section 69 r.w.s. 115BBE, and (ii) the interest income of Rs. 17,29,953/- as income from other sources, thereby determining the total income

Bangar Raju Penmetsa, Bhimavaram vs. ACIT., Central Circle -1(4), Hyderabad

ITA 1178/HYD/2025[2016-17]Status: DisposedITAT Hyderabad12 Dec 2025AY 2016-17

Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 132Section 250

rightly assessed sum of Rs. 4,00,00,000/- towards hand loan given by the assessee to M/s. Opus Holdings Pvt. Ltd. as unexplained investment under Section 69 of the Income-tax Act, 1961. The Ld. CIT(A) further noted that, in respect of additions made ... loose sheet (Annexure A/PBR/01) indicating cash credits from one Mr. Mohsin Khan; and second, Rs. 4,00,00,000/- was treated as unexplained investment under Section 69 based on another seized document allegedly reflecting a hand loan given by the assessee to M/s. Opus Holdings Pvt. Ltd. 6.1 Ground

Kannadahalli Govindasamy Krishnan, Krishnagiri vs. ITO, Ward-1, Krishnagiri

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

ITA 2607/CHNY/2025[2017-18]Status: DisposedITAT Chennai12 Dec 2025AY 2017-18

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunatha

For Appellant: Ms. R. Anitha, Addl. CITFor Respondent: 19.11.2025
Section 139Section 144Section 69

made an addition of Rs.12,08,000/- on account of cash deposit made during the demonetized period by treating it as unexplained investment u/s.69 of the Act. Further, the AO also considered that all the credits/deposits in the assessee bank accounts except cash deposits during demonetization period as the assessee

ACIT Circle-20(1), Mumbai vs. Jayesh Umakant Manania, Mumbai

Accordingly, the appeal filed by the Revenue stands dismissed

ITA 6588/MUM/2025[2012-13]Status: DisposedITAT Mumbai12 Dec 2025AY 2012-13

Bench: Smt. Beena Pillai & Shri Makarand Vasant Mahadeokarjayesh Umakant Acit Circle-20(1) Manania Room No. 305, 3Rd Floor, 131-6, Mani Bhuvan Piramal Chambers, Parel, Vs. Jain Society, Sion Mumbai-400 012 East, Mumbai-400022 Pan/Gir No. Aacpm0547J (Applicant) (Respondent) Revenue By Ms. Kavitha Kaushik, Ld. Dr Assessee By Shri Suchek Anchaliya, Ld. Ar Date Of Hearing 10.12.2025 Date Of Pronouncement 12.12.2025

Section 132Section 133ASection 143(1)Section 143(3)Section 147Section 148Section 153CSection 69Section 69A

made by the assessee.The Assessing Officer accordingly made an addition under section 69A, treating the amount as unexplained investment. 6. The assessee preferred an appeal before the CIT(A). Before the Learned CIT(A), the assessee raised legal as well as grounds 4 Jayesh Umakant Manania on merit. The assessee

Blue Breeze Trading LLP, Dlehi vs. DCIT Central Circle -27, Delhi

In the result, the appeal of the assessee is accordingly allowed in above terms for statistical purposes

ITA 5056/DEL/2025[2013-14]Status: DisposedITAT Delhi12 Dec 2025AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Raj Kumar Chauhan

Section 132Section 142(1)Section 153CSection 250Section 69

Income Tax (Appeals) has further erred both in law and on facts in upholding an addition of Rs. 19,80,000/-representing alleged unexplained investment u/s 69 of the Act. 8.1 That while upholding the above addition, the learned Commissioner of Income Tax (Appeals) Tax has failed to appreciate that

DCIT, Central Circle-2, Lucknow vs. Rakesh Kumar Pandey, Gonda

ITA 405/LKW/2025[2022-23]Status: DisposedITAT Lucknow11 Dec 2025AY 2022-23

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 145(3)Section 54FSection 56(2)(vii)Section 69Section 69A

with sustaining the addition of Rs.9,76,800/- and amount of investment shown by assessee at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment situated u/s 69 of the Act, where such difference was below 10% of FMV estimated by DVO. 2. Because the Ld. CIT(A) Lucknow

DCIT, Central Circle-2, Lucknow vs. Rakesh Kumar Pandey, Gonda Up

ITA 399/LKW/2025[2016-17]Status: DisposedITAT Lucknow11 Dec 2025AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 145(3)Section 54FSection 69

while sustaining the addition of Rs.9,76,800/- and amount of investment shown by assessee at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment situated u/s 69 of the Act, where such difference was below 10% of FMV estimated by DVO. 2. Because the Ld. CIT(A) Lucknow

DCIT, Central Circle-2, Lucknow vs. Rakesh Kumar Pandey, Gonda Up

ITA 398/LKW/2025[2015-16]Status: DisposedITAT Lucknow11 Dec 2025AY 2015-16

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 145(3)Section 54FSection 69

being difference between amount determined by DVO and amount of investment shown by assessee at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment u/s 69 of the Act, where such difference was below 10% of FMV estimated by DVO. 2. Because the Ld. CIT(A) Lucknow-III has erred

Rakesh Kumar Pandey, Gonda vs. DCIT/ACIT (Central)-2, Lucknow

ITA 348/LKW/2025[2015-16]Status: DisposedITAT Lucknow11 Dec 2025AY 2015-16

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 145(3)Section 54FSection 69

facts and circumstances of the case and in law, the CIT(A) erred in deleting the addition of Rs.7,49,062/- on account of unexplainned investment in construction of building of 19/2,2, Civil Lines, Gonda u/s 69 of the I.T. Act, 1961, without appreciating the fact that the percentage ... between amount determined by DVO by Rs.91,76,800/- and amount of investment shown by assessee at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment situated at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment situated u/s 69 of the Act, where such difference was below

Rakesh Kumar Pandey, Gonda vs. DCIT/ACIT, (Central)-2, Lucknow

In the result, the outcome of the appeals and Cross Objections are as

ITA 347/LKW/2025[2014-15]Status: DisposedITAT Lucknow11 Dec 2025AY 2014-15

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 40A(3)Section 69

Appeal that the t ing r © verification and were unreliable. and circumstances of the case and in law, the CIT(A) erred in of unexplained investment in 69 of the LT. Act, 1961 n valuation found in total »s declared by the see and a! above 10% 1.T.A. No.608/Lkw/2024 ... investment shown by assessee at Rs, 82,35,000/- towards investment in residential building situated at 57, Laxmanpuri, Lucknow in relevant year as unexplained investment u/s 69 of the Act, where such difference was below 10% of FMV estimated by DVO. Because the Ld. CIT(A) Lucknow-IIl has erred

Gurusukh Energy India Pvt. Ltd., Raipur vs. ITO, Ward-3(1), Raipur

In the result, appeal of the assessee is allowed

ITA 643/RPR/2025[2012-13]Status: DisposedITAT Raipur10 Dec 2025AY 2012-13

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.643/Rpr/2025 "नधा"रण वष" /Assessment Year : 2012-13

For Appellant: Shri Hardik Jain, CAFor Respondent: Dr. Priyanka Patel, Sr. DR
Section 127Section 127(1)Section 143(2)Section 143(3)Section 144B(1)Section 246(5)Section 250Section 282ASection 282A(1)Section 69C

jurisdiction. Ground 8 – The Ld. A.0 has erred in law as well as in fact while making an addition of Rs.4,87,689/- as unexplained investments. The addition is not sustainable in law. Ground 9 – The Ld. A.O has erred in law as well as in fact while making ... addition of Rs.30,00,000/- as unexplained investments. The addition is not sustainable in law. Ground 10 – 4 Gursukh Energy India Private Limited Vs. ITO, Ward-3(1), Raipur (C.G.) The Ld. A.O has erred in law as well as in fact while making' an addition of Rs.8180/- u/s.69C

Gattula Lakshmi Madhavi, Visakhapatnam vs. Assistant Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, the appeal filed by the assessee in ITA

ITA 387/VIZ/2025[2018-19]Status: DisposedITAT Visakhapatnam10 Dec 2025AY 2018-19

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.385, 386 & 387/Viz/2025 ("नधा"रण वष"/Assessment Year: 2018-19) Gattula Lakshmi Madhavi, Vs. Assistant Commissioner Visakhapatnam. Of Income Tax, Pan: Agfpg8929H Central Circle-1, Visakhapatnam. (Appellant) (Respondent) "नधा"रती "वारा/Assessee By: Shri Gvn Hari, Advocate (Hybrid) राज" व "वारा/Revenue By: Dr. Aparna Villuri, Sr. Ar सुनवाई क" तार"ख/Date Of 15/10/2025 Hearing: घोषणा क" तार"ख/Date Of 10/12/2025 Pronouncement: आदेश / Order Per Ravish Sood, Jm: The Captioned Appeals Filed By The Assessee Are Against The Respective Orders Passed By The Commissioner Of Income Tax (Appeals), Visakhapatnam-3, Dated 21/03/2025, 24/03/2025 & 16/04/2025, Which In Turn Arises From The Respective Orders Passed By The Assessing Officer (For Short, “Ao”) Under Section 147 Of The Income Gattula Lakshmi Madhavi Vs. Acit Tax Act, 1961 (For Short, "The Act”), Dated 27/03/2023; Under Section 271Aac(1) Of The Act, Dated 21/08/2023; & Under Section 270A Of The Act, Dated 21/08/2023 For Assessment Year 2018-19. As The Facts Involved In The Captioned Appeals Are Inextricably Interwoven, Therefore, The Same Are Being Taken Up & Disposed Of Vide A Consolidated Order.

For Appellant: Shri GVN Hari, AdvocateFor Respondent: Dr. Aparna Villuri, Sr. AR
Section 133ASection 147Section 148Section 148ASection 151ASection 270ASection 271ASection 69

Appeals) is not justified in sustaining the addition of Rs.21,35,549 made by the assessing officer u/s 69 of the Act towards unexplained investment in flats. 4. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.2,52,520 of made ... that the assessee had no explanation regarding the source of acquisition of the said two immovable properties (assets). Accordingly, the AO worked out the unexplained investment made by the assessee during the subject year at Rs. 21,35,549/-, as under: Gattula Lakshmi Madhavi vs. ACIT 10. Thereafter

Gattula Lakshmi Madhavi, Visakhapatnam vs. Assistant Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, the appeal filed by the assessee in ITA

ITA 386/VIZ/2025[2018-19]Status: DisposedITAT Visakhapatnam10 Dec 2025AY 2018-19

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.385, 386 & 387/Viz/2025 ("नधा"रण वष"/Assessment Year: 2018-19) Gattula Lakshmi Madhavi, Vs. Assistant Commissioner Visakhapatnam. Of Income Tax, Pan: Agfpg8929H Central Circle-1, Visakhapatnam. (Appellant) (Respondent) "नधा"रती "वारा/Assessee By: Shri Gvn Hari, Advocate (Hybrid) राज" व "वारा/Revenue By: Dr. Aparna Villuri, Sr. Ar सुनवाई क" तार"ख/Date Of 15/10/2025 Hearing: घोषणा क" तार"ख/Date Of 10/12/2025 Pronouncement: आदेश / Order Per Ravish Sood, Jm: The Captioned Appeals Filed By The Assessee Are Against The Respective Orders Passed By The Commissioner Of Income Tax (Appeals), Visakhapatnam-3, Dated 21/03/2025, 24/03/2025 & 16/04/2025, Which In Turn Arises From The Respective Orders Passed By The Assessing Officer (For Short, “Ao”) Under Section 147 Of The Income Gattula Lakshmi Madhavi Vs. Acit Tax Act, 1961 (For Short, "The Act”), Dated 27/03/2023; Under Section 271Aac(1) Of The Act, Dated 21/08/2023; & Under Section 270A Of The Act, Dated 21/08/2023 For Assessment Year 2018-19. As The Facts Involved In The Captioned Appeals Are Inextricably Interwoven, Therefore, The Same Are Being Taken Up & Disposed Of Vide A Consolidated Order.

For Appellant: Shri GVN Hari, AdvocateFor Respondent: Dr. Aparna Villuri, Sr. AR
Section 133ASection 147Section 148Section 148ASection 151ASection 270ASection 271ASection 69

Appeals) is not justified in sustaining the addition of Rs.21,35,549 made by the assessing officer u/s 69 of the Act towards unexplained investment in flats. 4. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.2,52,520 of made ... that the assessee had no explanation regarding the source of acquisition of the said two immovable properties (assets). Accordingly, the AO worked out the unexplained investment made by the assessee during the subject year at Rs. 21,35,549/-, as under: Gattula Lakshmi Madhavi vs. ACIT 10. Thereafter