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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

Sh. Surender Kumar Chawla, Rudrapur vs. ACIT, CC, Haldwani

In the result, assessee’s appeals; ITA No

ITA 76/DDN/2024[2017-18]Status: DisposedITAT Dehradun20 Nov 2025AY 2017-18

Bench: BEFORESHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have ered in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

Sh. Surender Kumar Chawla, Rudrapur vs. ACIT, CC-, Haldwani

In the result, assessee’s appeals; ITA No

ITA 75/DDN/2024[2016-17]Status: DisposedITAT Dehradun20 Nov 2025AY 2016-17

Bench: BEFORESHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have ered in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

Sh. Surender Kumar Chawla, Rudrapur vs. ACIT, CC- Haldwani, Haldwani

In the result, assessee's appeals; ITA No

ITA 74/DDN/2024[2015-16]Status: DisposedITAT Dehradun20 Nov 2025AY 2015-16
Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have erred in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

Sh.Surender Kumar Chawla, Rudrapur vs. ACIT, CC, Haldwani

In the result, assessee’s appeals; ITA No

ITA 63/DDN/2024[2014-15]Status: DisposedITAT Dehradun20 Nov 2025AY 2014-15

Bench: BEFORESHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have ered in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

Sh. Surinder Kumar Chawla, Rudrapur vs. ACIT, CC, Haldwani

In the result, assessee’s appeals; ITA No

ITA 62/DDN/2024[2014-15]Status: DisposedITAT Dehradun20 Nov 2025AY 2014-15

Bench: BEFORESHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have ered in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

Sh.Surender Kumar Chawla, Dehradun vs. ACIT, CC, Dehradun, Haldwani

In the result, assessee’s appeals; ITA No

ITA 210/DDN/2024[2011-12]Status: DisposedITAT Dehradun20 Nov 2025AY 2011-12

Bench: BEFORESHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 142Section 143(3)Section 68Section 69

erred in making and confirming addition of Rs.1,05,10,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 6. The learned assessing officer as also learned CIT(A) have ered in making and confirming ... addition of Rs.10,66,71,000/- on account of alleged purchase of property from Mr. Mohan Pal as alleged unexplained investment u/s 69 of the Income Tax Act, 1961. 7. The learned assessing officer as also learned CIT(A) have erred in making and confirming addition of Rs.2

DCIT-1(1), Bhilai vs. Saligram Tripathi, Durg

In the result, appeal of the Revenue is allowed for statistical purposes

ITA 582/RPR/2025[2013-14]Status: DisposedITAT Raipur20 Nov 2025AY 2013-14

Bench: Shri Partha Sarathi Chaudhury & Shri Arun Khodpiaआयकर अपील सं. / Ita No.582/Rpr/2025 "नधा"रण वष" / Assessment Year : 2013-14 The Deputy Commissioner Of Income Tax-1(1), Bhilai (C.G.)

For Appellant: None (Petition filed)For Respondent: Shri Ram Tiwari, CIT-DR
Section 69

circumstances of the case in law, the ld. CIT Appeal was justified in deleting the addition of Rs.4,57,774 on account of unexplained investment under section 69 of the Income Tax Act,1961. 3. Whether on the fact and in the circumstances of the case ... case and in law, the ld. CIT Appeal was justified in deleting the addition of Rs.2,73,85,039 on account of unexplained investment under section 69 of the Income Tax Act,1961.” 3 DCIT-1(1), Bhilai Vs. Saligram Tripathi 2. At the time of hearing, none appeared

Sachin Shantilal Khiwansara, Beed vs. Income Tax Officer, Aurangabad

In the result, appeal of the assessee is allowed for statistical purpose

ITA 2288/PUN/2025[2016-17]Status: DisposedITAT Pune20 Nov 2025AY 2016-17

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपऩल सं. / Ita No.2288/Pun/2025 निर्धारण वषा / Assessment Year: 2016-17 Sachin Shantilal Khiwansara, V The Income Tax Officer, Main Road, Shirur Kasar, S. Ward-1(5), Aurangabad. Shirur So., Beed, Beed – 413249. Pan: Bytpk1339N Appellant/ Assessee Respondent / Revenue Assessee By Shri Saurabh D.Khivansara Revenue By Smt Saumya Pandey Jain-Addl.Cit Date Of Hearing 20/11/2025 Date Of Pronouncement 20/11/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: In This Case, Appeal Has Been Filed By The Assessee Against The Order Of Ld.Commisioner Of Income Tax(Appeal)[Nfac] Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2016-17 Dated 17.07.2025. The Assessee Has Raised The Following Grounds Of Appeal : “1. That On Facts & In Law, The Ex-Parte Order Of Ld. Cit Appeals, Nfac Is Opposed To Law & Against The Principles Of Natural Justice & Accordingly The Impugned Appellate Order Is Liable To Be Set Aside.

Section 144Section 147Section 148Section 250Section 250(6)

That on the facts and in the circumstance the learned A.O. has erred in making addition of Rs. 1,03,86,725/- as Unexplained Investments u/s 69 of the Act. The addition is unjustified, arbitrary and deserves to be deleted. 6. That any other grounds may be raised during

Assistant Commissioner of Income Tax, Central Circle-2, Trichy vs. Ramasamy Rajasehar, Perambalur

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

ITA 3336/CHNY/2024[2014-15]Status: DisposedITAT Chennai20 Nov 2025AY 2014-15

Bench: Shri S.S. Viswanethra Ravi & Shri S. R. Raghunatha

For Appellant: Shri. D. Anand, AdvocateFor Respondent: Mr. Shiva Srinivas, C.I.T
Section 143(3)Section 69

facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition of Rs.14,91,00,000/- made towards unexplained investment u/s.69 by holding the addition as protective in nature without taking cognizance of the fact that for AY 2014-15, this impugned investments found vide ... tantamount to double taxation” without taking cognizance of the facts of the case where this observation is not factually correct vis-à-vis the unexplained investment or the entities of the Dhanalakshmi Srinivasan Group. 4. For these grounds and any other ground including amendment of grounds that may be raised

Anita Rani W/O Sh. Rajender Singh, Cheeka Guhla, Kaithal vs. Income Tax Officer, Ward-1, Kaithal

In the result, appeal of the Assessee is allowed for statistical purposes

ITA 781/CHANDI/2025[2013-14]Status: DisposedITAT Chandigarh19 Nov 2025AY 2013-14

Bench: SHRI. LALIET KUMAR (Judicial Member)

For Appellant: Shri Navdeep Monga, AdvocateFor Respondent: Shri Prem Singh, Addl. CIT, Sr. DR
Section 144Section 148Section 234ASection 250Section 69

Assessing Officer, however, completed the reassessment ex parte u/s 144 r.w.s. 147, making an addition of Rs.17,64,000/- treating it as unexplained investment u/s 69 3 4. The assessee thereafter filed an appeal before the Ld. CIT(A) with a delay of 250 days, supported by an application explaining

Kalpana Ravish Maru, Malegaon vs. Income Tax Officer, Ward 1, Malegaon

In the result, appeal of the Assessee is allowed for

ITA 1724/PUN/2025[2015-16]Status: DisposedITAT Pune19 Nov 2025AY 2015-16

Bench: Shri Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Dhiraj Dandgaval, CAFor Respondent: Shri Uodol Raj Singh, DR
Section 144Section 147Section 148Section 250Section 250(6)

merits, ground Nos. 2 to 4 have been raised against the additions on account of unexplained cash deposits and unexplained investment, totaling to Rs. 2,01,66,744/- . 3. At the outset, learned counsel for the assessee submitted that Ld.CIT(A) has dismissed the assessee’s appeal on account

Sujatha Kumar, Banashankari vs. Income Tax Officer, Ward-1, Gudur

In the result, appeal of the Assessee is allowed for statistical purposes

ITA 1439/HYD/2025[2016-17]Status: DisposedITAT Hyderabad19 Nov 2025AY 2016-17

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.1439/Hyd/2025 Assessment Year – 2016-2017 Mrs. Sujatha Kumar, The Income Tax Officer, Bengaluru – 560 085 Ward-1, Gudur-524101. Vs. Andhra Pradesh Pan Ahmpk3172C (Appellant) (Respondent) िनधा"रती "ारा /Assessee By: Ca Siddesh Nagraj Gaddi राज" व "ारा /Revenue By: Sri Abhinav Pitta, Sr. Ar

For Appellant: CA Siddesh Nagraj GaddiFor Respondent: Sri Abhinav Pitta, Sr. AR

that the Assessing Officer has made the additions on account of capital gain arising from the sale of the immovable property and further unexplained investment in purchase of property as well as investment in shares without considering the bare fact the assessee was having sufficient funds as sale proceeds

Hitec Cyberspazio LLP, Hyderabad vs. DCIT., Circle-6(1), Hyderabad

ITA 1206/HYD/2025[2022-23]Status: DisposedITAT Hyderabad19 Nov 2025AY 2022-23

Bench: Us:

Section 142(1)Section 143(2)Section 143(3)Section 69

Assessing Officer is not justified in making the addition of Rs.40,44,59,669/- under section 69 of the Act towards unexplained investment in purchase of immovable property though they said Investment formed part of the financial statements and is duly reflected in the Balance sheet. 5. On the facts ... case and in law, the Ld. Assessing Officer is not justified in making the addition of Rs.141,57,00,000/- under section 69 towards unexplained investment in purchase of immovable property without verifying the contents of the relevant sale deed bearing No.16519 dated 20.09.2021 which clearly reveals the fact that

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

ITA 1556/KOL/2025[2021-22]Status: DisposedITAT Kolkata19 Nov 2025AY 2021-22
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon'ble Supreme Court in the case of PCIT

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

In the result, all six appeals of the assessee are allowed and all six appeals of the revenue are dismissed

ITA 1555/KOL/2025[2020-21]Status: DisposedITAT Kolkata19 Nov 2025AY 2020-21

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubeyita No.1363/Kol/2025: Assessment Year: 2017-18

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon’ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

In the result, all six appeals of the assessee are allowed and all six appeals of the revenue are dismissed

ITA 1554/KOL/2025[2019-20]Status: DisposedITAT Kolkata19 Nov 2025AY 2019-20

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubeyita No.1363/Kol/2025: Assessment Year: 2017-18

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon’ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

In the result, all six appeals of the assessee are allowed and all six

ITA 1553/KOL/2025[2018-19]Status: DisposedITAT Kolkata19 Nov 2025AY 2018-19

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubey

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon'ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon'ble Delhi High Court, after considering the fact and circumstances

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

In the result, all six appeals of the assessee are allowed and all six appeals of the revenue are dismissed

ITA 1552/KOL/2025[2017-18]Status: DisposedITAT Kolkata19 Nov 2025AY 2017-18

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubeyita No.1363/Kol/2025: Assessment Year: 2017-18

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon’ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Shree Ramchandra Ingot India Private Limited, Kolkata

In the result, all six appeals of the assessee are allowed and all six appeals of the revenue are dismissed

ITA 1551/KOL/2025[2016-17]Status: DisposedITAT Kolkata19 Nov 2025AY 2016-17

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubeyita No.1363/Kol/2025: Assessment Year: 2017-18

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon’ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances

Shree Ramchandra Ingot India Pvt. Ltd., Kolkata vs. D.C.I.T., CC-4(3), Kolkata

In the result, all six appeals of the assessee are allowed and all six appeals of the revenue are dismissed

ITA 1368/KOL/2025[2016-2017]Status: DisposedITAT Kolkata19 Nov 2025AY 2016-2017

Bench: S/Shriand Rajesh Kumar & Pradip Kumar Choubeyita No.1363/Kol/2025: Assessment Year: 2017-18

For Appellant: Shri Manish Rastogi, AdvFor Respondent: Shri Sanat Kumar Raha, CIT DR
Section 115JSection 132Section 139(1)Section 143(3)Section 147Section 148

investments have been accepted in the earlier assessment years in the hands of the amalgamating companies, then how the same can be treated as unexplained investments when these investments were sold by the same amalgamating companies. The decision of Hon’ble Supreme Court in the case of PCIT ... that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon’ble Delhi High Court, after considering the fact and circumstances