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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

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Ethirajulu Vajravel Kumaran, Thiruvannamalai

In the result, all the six appeals of the Revenue are

ITA 1654/CHNY/2025[2020-21]Status: DisposedITAT Chennai21 Oct 2025AY 2020-21

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri Shiva Srinivas, CITFor Respondent: Shri R. Venkata Raman, CA
Section 1Section 132Section 139(1)Section 14Section 143(3)Section 153ASection 250Section 271(1)(c)

serent arttehre ara, ‘al’ saa, Ueas IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI AN sist atrot &, Soar Ue

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Ethirajulu Vajravel Kumaran, Thiruvannamalai

In the result, all the six appeals of the Revenue are

ITA 1653/CHNY/2025[2019-20]Status: DisposedITAT Chennai21 Oct 2025AY 2019-20

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri Shiva Srinivas, CITFor Respondent: Shri R. Venkata Raman, CA
Section 1Section 132Section 139(1)Section 14Section 143(3)Section 153ASection 250Section 271(1)(c)

serent arttehre ara, ‘al’ saa, Ueas IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI AN sist atrot &, Soar Ue

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Ethirajulu Vajravel Kumaran, Tiruvannamalai

In the result, all the six appeals of the Revenue are

ITA 1652/CHNY/2025[2018-19]Status: DisposedITAT Chennai21 Oct 2025AY 2018-19

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri Shiva Srinivas, CITFor Respondent: Shri R. Venkata Raman, CA
Section 1Section 132Section 139(1)Section 14Section 143(3)Section 153ASection 250Section 271(1)(c)

serent arttehre ara, ‘al’ saa, Ueas IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI AN sist atrot &, Soar Ue

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Ethirajulu Vajravel Kumaran, Tiruvannamalai

In the result, all the six appeals of the Revenue are

ITA 1651/CHNY/2025[2017-18]Status: DisposedITAT Chennai21 Oct 2025AY 2017-18

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri Shiva Srinivas, CITFor Respondent: Shri R. Venkata Raman, CA
Section 1Section 132Section 139(1)Section 14Section 143(3)Section 153ASection 250Section 271(1)(c)

serent arttehre ara, ‘al’ saa, Ueas IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI AN sist atrot &, Soar Ue

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Ethirajulu Vajravel Kumaran, Chennai

In the result, all the six appeals of the Revenue are

ITA 1650/CHNY/2025[2015-16]Status: DisposedITAT Chennai21 Oct 2025AY 2015-16

Bench: Shri George George K & Shri S.R. Raghunatha

For Appellant: Shri Shiva Srinivas, CITFor Respondent: Shri R. Venkata Raman, CA
Section 1Section 132Section 139(1)Section 14Section 143(3)Section 153ASection 250Section 271(1)(c)

serent arttehre ara, ‘al’ saa, Ueas IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI AN sist atrot &, Soar Ue

Harshadbhai Maganbhai Patel, Surat vs. Income Tax Officer - Ward 1(3)(2), Surat

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

ITA 111/SRT/2024[2016-17]Status: DisposedITAT Surat17 Oct 2025AY 2016-17

Bench: Shri Dinesh Mohan Sinha & Shri Bijayananda Prusethआयकर अपील सं./Ita No.111/Srt/2024 Assessment Year: 2016-17 (Hybrid Hearing) Harshadbhai Maganbhai Patel Income Tax Officer Ward-1(3)(2), बनाम/ C-1007, Pratisha Tower, Surat, Anavil Business Center, Vs. Sarela Wadi, Ghod-Dod Road, Adajan Hazira Road, Adajan, Surat- 395 007 Surat-395 007 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Adgpp 3387 C (अपीलाथ"/Appellant) (""थ" /Respondent) िनधा"रती की ओर से /Appellant By Shri Rasesh Shah, Ca राज" की ओर से /Respondent By Shri Ravinder Sindhu, Cit-Dr सुनवाई की तारीख/Date Of Hearing 24/07/2025 उद्घोषणा की तारीख/Date Of Pronouncement 17/10/2025

Section 142(1)Section 143(2)Section 144(3)Section 250

action of the Assessing Officer by sustaining the addition of Rs.2,05,49,500/- out of Rs.2,61,42,500/- on account of unexplained investment. ITA No.111/Srt/2024 A.Y 16-17 Harshadbhai M Patel 2. On the facts and circumstances of the case as well as law on the subject

Sh. Sukhvinder Singh, Kanpur vs. Pr CIT, Central, Kanpur

ITA 191/LKW/2020[2014-15]Status: DisposedITAT Lucknow17 Oct 2025AY 2014-15

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

For Appellant: Shri Samrat Chandra, C.AFor Respondent: Shri R. K. Agarwal, CIT(DR)
Section 263

Rs.9,50,500/- therefore an addition of Rs 3,39,900/- has been made to the total income of the assessee on account of unexplained investment AY 2012-13." (B.2) Subsequently, the Ld. PCIT started proceedings u/s 263 of the Act. Vide notice dated 27.02.2020, the Ld. PCIT

Sh. Sukhvinder Singh, Kanpur vs. Pr CIT, Central, Kanpur

In the result, both appeals filed by the assessee are allowed for statistical purposes

ITA 190/LKW/2020[2012-13]Status: DisposedITAT Lucknow17 Oct 2025AY 2012-13

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

For Appellant: Shri Samrat Chandra, C.AFor Respondent: Shri R. K. Agarwal, CIT(DR)
Section 263

therefore an addition of Rs 3,39,900/- has been made to the total income of the assessee on account of unexplained investment AY 2012-13.” (B.2) Subsequently, the Ld. PCIT started proceedings u/s 263 of the Act. Vide notice dated 27.02.2020, the Ld. PCIT was of the view that

Avani Dipakbhai Shah, Vadodara vs. The ACIT, Circle Intl. Txn., Vadodara

The appeal of the assessee is allowed

ITA 707/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad17 Oct 2025AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Jigar Adhyaru, ARFor Respondent: Shri Rameshwar P Meena, Sr. DR
Section 132Section 153CSection 271F

153C read with section 144 on 19.05.2022, adding ₹7,32,68,860/- to the total income of the assessee on a protective basis as unexplained investment under section 69 of the Act. 6. Further, since the assessee had neither filed her return of income under section 139(1) within

Avani Dipakbhai Shah, Vadodara vs. The ACIT, Circle Intl. Txn., Vadodara

The appeal of the assessee is allowed

ITA 706/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad17 Oct 2025AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Jigar Adhyaru, ARFor Respondent: Shri Rameshwar P Meena, Sr. DR
Section 132Section 153CSection 271F

153C read with section 144 on 19.05.2022, adding ₹7,32,68,860/- to the total income of the assessee on a protective basis as unexplained investment under section 69 of the Act. 6. Further, since the assessee had neither filed her return of income under section 139(1) within

Avani Dipakbhai Shah, Vadodara vs. The ACIT, Circle Intl. Txn., Vadodara

The appeal of the assessee is allowed

ITA 705/AHD/2025[2014-15]Status: DisposedITAT Ahmedabad17 Oct 2025AY 2014-15

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Jigar Adhyaru, ARFor Respondent: Shri Rameshwar P Meena, Sr. DR
Section 132Section 153CSection 271F

153C read with section 144 on 19.05.2022, adding ₹7,32,68,860/- to the total income of the assessee on a protective basis as unexplained investment under section 69 of the Act. 6. Further, since the assessee had neither filed her return of income under section 139(1) within

Chandra Sekhar Ravula, Hyderabad vs. ITO., Ward-5(1), Hyderabad

The appeals of the assessee are allowed for statistical purposes

ITA 1099/HYD/2025[2013-14]Status: DisposedITAT Hyderabad17 Oct 2025AY 2013-14

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No. 1099/Hyd/2025 (िनधा"रण वष"/Assessment Year: 2013-14) Chandra Sekhar Ravula, Vs. Income Tax Officer, Hyderabad. Ward-5(1), Hyderabad. Pan: Agkpr5081N (Appellant) (Respondent)

For Appellant: Sri AV Raghuram, AdvocateFor Respondent: Sri Gurpreet Singh, Sr. AR
Section 142(1)Section 144Section 147Section 148Section 69

Without prejudice to the above, the Ld. CIT(A) erred in sustaining the addition made by AO of Rs. 1,07,00,000 as unexplained investment under section 69 of the Act. 3. The authorities below failed to appreciate the reply filed by the appellant before the Investigation Wing, wherein

Pratima Hitesh Mehta, Mumbai vs. DCIT, CC -4(1), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 232/MUM/2025[1992-1993]Status: DisposedITAT Mumbai17 Oct 2025AY 1992-1993

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 1992-1993 Pratima Hitesh Mehta Vs Deputy Commissioner Of 32, Madhuli Apartment, Income-Tax, Cc -4(1), 3Rd Floor, Dr. A.B Road, Worli, Mumbai Mumbai - 400018 [Pan: Abnpm8226G] Appellant Respondent Present For: Appellant By : Shri Dharmesh Shah & Ms. Mitali Parekh, Advocates Respondent By : Dr. P. Daniel (Special Counsel For Dept.) Date Of Hearing : 29.07.2025 Date Of Pronouncement : 17.10.2025 O R D E R Per Girish Agrawal: This Appeal Filed By The Assessee Is Against The Order Of Cit(A)-52, Mumbai, Vide Order No. Itba/Apl/S/250/2024-25/1070774879(1), Dated 29.11.2025 Passed Against The Assessment Order By Deputy Commissioner Of Income-Tax, Cc-4(1), Mumbai, U/S. 144 R.W.S. 254 Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”), Dated 19.07.2024 For Assessment Year 1992-93. 2. Grounds Taken By The Assessee Are Reproduced As Under: 1. The Ld. Cit(A) Has Erred In Law & In Fact In Partly Confirming The Assessment Order Passed U/S. 144 R.W.S. 254 Of The Act Dated 19.07.2024. 2. The Ld. Cit(A) Has Erred In Law & In Fact In Not Quashing The Assessment Order Which Is Time Barred & Hence Void.

For Appellant: Shri Dharmesh Shah and Ms. Mitali Parekh, AdvocatesFor Respondent: Dr. P. Daniel (Special Counsel for Dept.)
Section 132Section 132(4)Section 144Section 220Section 234D

Mehta AY 1992-93 3. The Ld. CIT(A) has erred in law and in fact in confirming the addition made on account of unexplained investment amounting to Rs. 4,70,49,835/-- 4. The Ld. CIT(A) ought to have eld that the deduction of interest expenditure ... instead of setting aside to the Ld. A.O. for verification. 5. The Ld. CIT(A) ought to have deleted the addition on account of unexplained investments to the extent relief granted by the Hon'ble Tribunal instead of setting aside to the Id. A.O. for verification

Meenu Gupta, Meerut vs. Assistant Commissioner of Income Tax, Central Circle, Meerut

In the result, the assessee’s appeal is allowed in the aforesaid manner

ITA 4515/DEL/2025[2022-23]Status: DisposedITAT Delhi17 Oct 2025AY 2022-23

Bench: Sh. Sudhir Kumar & Sh. Manish Agarwalassessment Year- 2022-23 Meenu Gupta Vs. Acit, Central Circle Meerut 214, Madhuban Colony, Baghpat Road Meerut 250002 Uttar Pradesh 250002 Pan No. Acrpg2700J (Appellant) (Respondent)

Section 142(1)Section 143(2)Section 143(3)Section 65Section 65BSection 69Section 69B

case of Ritu Tuli Vs. DCIT ITA Np. 2016/Del/ 2023 dated 31-12-2024 wherein, it has been held that no addition for unexplained investment in property can be made under section 69B of the Act based on an illegible, unsigned copy of an image or photo extracted from ... accordingly. 6. In the result, the assessee’s appeal is allowed in the aforesaid manner. 7. In this case the addition was made as unexplained investment u/s 69 B of the Act, on the basis of the whatsapp message without any corroborative evidence. The assessee’s case is squarely covered

Stercon Energy Pvt. Ltd., Delhi vs. ACIT, Central Circle-29, Delhi

In the result, the appeal of the assessee is allowed

ITA 5798/DEL/2024[2016-17]Status: DisposedITAT Delhi17 Oct 2025AY 2016-17

Bench: SHRI SUDHIR KUMAR (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 153C

judicial proceedings corroborated the fact that the assessee company was complicit in accommodation entry business and earned commission therefrom. 6. Addition on Account of Unexplained Investment  In addition to commission income, unexplained investment of Rs. 13,29,719/- (1% of total capital of Rs. 13,29,71,951/-) was added ... said accumulated credits, resulting in an addition of Rs. 25,91,654/- to the income of the assessee-company.  Further, the unexplained investment on account of cash consideration paid for acquiring control of the company, as admitted by Shri Himanshu Verma, was separately brought to tax. Stercon Energy

Stercon Energy Pvt. Ltd., Delhi vs. ACIT Central Circle- 29, Delhi

In the result, the appeal of the assessee is allowed

ITA 5797/DEL/2024[2017-18]Status: DisposedITAT Delhi17 Oct 2025AY 2017-18

Bench: SHRI SUDHIR KUMAR (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 153C

judicial proceedings corroborated the fact that the assessee company was complicit in accommodation entry business and earned commission therefrom. 6. Addition on Account of Unexplained Investment  In addition to commission income, unexplained investment of Rs. 13,29,719/- (1% of total capital of Rs. 13,29,71,951/-) was added ... said accumulated credits, resulting in an addition of Rs. 25,91,654/- to the income of the assessee-company.  Further, the unexplained investment on account of cash consideration paid for acquiring control of the company, as admitted by Shri Himanshu Verma, was separately brought to tax. Stercon Energy

Stercon Energy Pvt Ltd, Delhi vs. ACIT, Central Circle-29, Delhi

In the result, the appeal of the assessee is allowed

ITA 5796/DEL/2024[2018-19]Status: DisposedITAT Delhi17 Oct 2025AY 2018-19

Bench: SHRI SUDHIR KUMAR (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 153C

judicial proceedings corroborated the fact that the assessee company was complicit in accommodation entry business and earned commission therefrom. 6. Addition on Account of Unexplained Investment  In addition to commission income, unexplained investment of Rs. 13,29,719/- (1% of total capital of Rs. 13,29,71,951/-) was added ... said accumulated credits, resulting in an addition of Rs. 25,91,654/- to the income of the assessee-company.  Further, the unexplained investment on account of cash consideration paid for acquiring control of the company, as admitted by Shri Himanshu Verma, was separately brought to tax. Stercon Energy

Deepak Kumar Gupta, Kanpur vs. ITO Ward 2(1), Moradabad

In the result, appeal of the Assessee is partly allowed as indicated above

ITA 4528/DEL/2024[2014-15]Status: DisposedITAT Delhi17 Oct 2025AY 2014-15

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarassessment Year: 2014-15 Deepak Kumar Gupta, Vs. Income Tax Officer, 7/115, Flat No. B-1, Sai Niwas, Ward 2(1), Arya Nagar, Kanpur - 208020 Moradabad ( U.P) Uttar Pradesh. Pin: 244 001 Pan :Acmpg1836E (Appellant) (Respondent)

Section 142(1)Section 147Section 148Section 151Section 250Section 271(1)(c)Section 271FSection 69

confirming the addition of Rs. 40,23,000/- made by A.O (NFAC) u/s 69 of the I.T Act for so called unexplained investment in the purchase of immovable property. 2. That the source of deposits (credit entries) in Bank Account from where the payment towards purchase of property has been

Deputy Commissioner of Income Tax, Jhandewalan, New Delhi vs. Israni Buildwell Private Limited, Delhi

ITA 3132/DEL/2024[2014-15]Status: HeardITAT Delhi17 Oct 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

Section 148Section 194CSection 194ISection 68Section 69Section 69C

discharge its onus during assessment proceedings? 3) The Ld. CTT(A) has erred in deleting the addition of Rs.50,00,000/-on account of unexplained investment under section 69 of the Act even when the assessee failed to discharge its onus during assessment proceedings ... Rs.13,83,860 + unexplained cash credit Rs.9,31,00,000 + unexplained expenditure of Rs.13,83,860 + contractual payment without TDS of Rs.4,50,000/- + unexplained investment of Rs.50,00,000/-). Aggrieved, the respondent assessee filed appeal before the Ld. CIT(A) and succeeded there. Thereafter, the Revenue has filed this

Ravinder Singh Brar, Faridkot, Punjab vs. Income Tax Officer, Faridkot

In the result, we set aside the appeal back to the files of the Assessing Officer for a limited

ITA 373/ASR/2023[2012-13]Status: DisposedITAT Amritsar16 Oct 2025AY 2012-13

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta

For Appellant: None
Section 143(3)Section 147Section 148Section 250Section 69A

absence of any response from the assessee explaining the nature and source of such investment the said amount has been added back as unexplained investment u/s 69A of the Act. 6. The matter was carried in appeal where written submission has been filed by the assessee challenging the reopening