“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

Hira, Dausa vs. Commissioner of Income Tax, Dausa

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

ITA 34/JPR/2024[2017-18]Status: DisposedITAT Jaipur30 Sept 2025AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: NoneFor Respondent: Shri Ghanshyam Meena, JCIT-DR

Section 142(1)Section 144Section 234Section 69A

account of alleged unaccounted & unexplained cash deposited in OHDN into the bank account during demonetization period and treated the same as unexplained investment Uis 69A of the IT Act, 1961. Therefore, the action of the Ld. CIT (Appeals), NFAC, Delhi is erroneous and bad in law as per the provisions

Chirag Nitin Shah, Bhavnagar vs. The ACIT, Circle-1, Bhavnagar

In the result, the appeal of the assessee is allowed

ITA 1398/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2018-19

Bench: DR. BRR Kumar (Vice President), Shri Siddhartha Nautiyal (Judicial Member)

Section 115BSection 143(3)Section 271ASection 68Section 69

That on facts, and in law, the learned NFAC has grievously erred confirming the addition of Rs.5,18,175/ made as unexplained investment in purchases u/s 69 of the Act, and taxing the same u/s 115BBE of the Act, (3) The appellant craves leave to add, alter, amend any ground ... invoices and confirmations, but the AO held that the same were not reconciled with the original purchase records and accordingly treated the purchases as unexplained investment under section 69 read with section 115BBE of the Act. On this basis, the AO completed the assessment by making additions of Rs.19

ACIT Central Circle 2(3), Ahmedabad vs. Vrajlal Babulal Bambharoliya, Ahmedabad

Appeals of the Revenue are dismissed

ITA 1132/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2018-19

Section 132Section 153CSection 250

purchase of this land from the assessees before us, was found during search nor any addition made in their hands on account of any unexplained investment made in the impugned lands. Noting, therefore, that besides the whatsapp chat found from a third unconnected party to the deal, there ... addition on ITA Nos. 1130 to 1132/Ahd/2025 A/w. CO No. 62 to 64/Ahd/2025 [Ashokkumar Babulal Bambharoliya & Ors.] A.Y. 2018-19 - 16 – account of unexplained investment in the impugned land was made in the hands of the purchaser.  The assessee was not allowed to cross examine Mr. Manghlani. 13. The above

ACIT Central Circle 2(3) Ahmedabad, Ahmedabad vs. Arvindkumar Babulal Bambharoliya, Ahmedabad

Appeals of the Revenue are dismissed

ITA 1131/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2018-19

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI SIDDHARTHA NAUTIYAL (Judicial Member)

Section 132Section 153CSection 250

ACIT Central Circle 2(3) Ahmedabad, Ahmedabad vs. Ashokkumar Babulal Bambharoliya, Ahmedabad

Appeals of the Revenue are dismissed

ITA 1130/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2018-19

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), SHRI SIDDHARTHA NAUTIYAL (Judicial Member)

Section 132Section 153CSection 250

Late Ashvinbhai Umedbhai Patel (Deceased) by Legal Heir Smit Ashvinbhai Patel, Kheda vs. The ITO, Ward-1, Nadiad

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

ITA 1106/AHD/2025[2011-12]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2011-12

Section 271(1)Section 271CSection 69Section 69A

Appeals) erred in law and on facts in not properly considering the appellants grounds that there was no unexplained investment and addition was made on presumptions that cash deposited / credits in bank account was unexplained to be treated as deemed income on which huge penalty was levied The grounds

Late Ashvinbhai Umedbhai Patel (Deceased) by Legal Heir Smit Ashvinbhai Patel, Kheda vs. The ITO, Ward-1, Nadiad

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

ITA 1105/AHD/2025[2011-12]Status: DisposedITAT Ahmedabad30 Sept 2025AY 2011-12

Section 271(1)Section 271CSection 69Section 69A

Ramakrishna Gavanahally, Chikmagalur vs. Income Tax Officer, Ward-1, Chikmagalur

Accordingly appeal filed by the assessee is allowed for statistical purposes

ITA 1756/BANG/2025[2017-18]Status: DisposedITAT Bangalore30 Sept 2025AY 2017-18

Bench: Shri Prashant Maharishiassessment Year : 2017-18

For Appellant: Mr. S Pahani Kumar CAFor Respondent: Shri Ganesh R. Ghale, Advocate, Standing Counsel

Section 133Section 142Section 144Section 249Section 251

therefore in absence of any details, the learned assessing officer made the addition of entire cash deposit made during the demonetisation period as unexplained investment. It was also found as per enquiry under section 133 (6) of the act that assessee has been running his business wherein the gross receipts

Shri. Vijaysingh Madhavrao Patwardhan, Mumbai vs. The Assistant Commissioner of Income Tax-26(1), Mumbai (Now DCIT-41(1)(1), Mumbai)

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

ITA 4993/MUM/2025[2006-07]Status: DisposedITAT Mumbai30 Sept 2025AY 2006-07

Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)

For Appellant: Ms. Vinita Shah (virtually appeared)For Respondent: Ms. Kavitha Kaushik (SR DR)

Section 143(3)Section 147Section 250Section 271(1)(c)Section 69

made of Rs.1,89,41,053/- u/s.69 of the Income Tax Act, 1961 by treating the peak balance of Foreign bank account as alleged Unexplained Investment, without considering the facts and circumstances of the case.” 4. Brief facts of the case are that the assessee is an individual ... dated 30.03.2015, determining total income at Rs. 2,03,55,050/- after making addition of Rs. 1,89,41,053/- as unexplained investment u/s. 69 of the Act and Rs. 29,993/- as short term capital gain @10%. The ld. AO also initiated penalty proceedings 2 Shri Vijaysingh Madhavrao Patwardhan

Usha Singh, Mumbai vs. ITO 16(3)(1), Mumbai, Aayakar Bhawan

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

ITA 4755/MUM/2025[2014-15]Status: DisposedITAT Mumbai30 Sept 2025AY 2014-15

Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)

For Appellant: Ms. Namrata DedhiaFor Respondent: Ms. Kavitha Kaushik (SR DR)

Section 139(1)Section 144Section 147Section 148Section 250Section 69

erred in ignoring the computation of income and explanation provided for sources of funds and thereby considering the purchase value of such property as unexplained investment u/s. 69. Usha Singh 2. Without prejudice to the above, the learned commissioner has erred in not considering the loan confirmations, copy ... judgement assessment for the reason that the assessee has not complied with the said notice, thereby making addition of Rs. 39,000,000/- as unexplained investment u/s. 69 of the Act. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 27.05.2025 upheld

Baburao Ravji Chavan, Dombivli vs. Assessing Officer, Kalyan

In the result the appeal filed by the assessee stands allowed

ITA 2009/MUM/2025[2018-19]Status: DisposedITAT Mumbai30 Sept 2025AY 2018-19

Bench: Smt. Beena Pillai ()

Section 143(2)Section 148Section 148ASection 234ASection 250Section 271ASection 68ASection 69A

Ld.AO thus treated the alleged transaction entered in the name of the assessee amounting to Rs.11,97,187/- during the year under consideration as unexplained investment under section 69 of the act. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). 3. The Ld.CIT

Poornima Sanjay Prabhu, Mumbai vs. Assessment Unit, Faceless Assessment Centre

In the result, the appeal of the assessee is allowed

ITA 2006/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Sept 2025AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), MS. RENU JAUHRI (Accountant Member)

Section 115BSection 143(1)Section 147Section 148Section 194ISection 6Section 69

furnish the required documentary evidences in respect of purchase of immovable property has treated the entire source of purchase of Rs.1,76,16,200/- unexplained investment u/s.69 and invoked Section 115BBE. 8. The ld. CIT(A) without considering the assessee’s submissions and the documents furnished that the investment ... joint holder in the registered Sale Agreement dated 29/06/2016, and therefore treated the entire consideration of ₹1,76,16,200/– as her unexplained investment. 7 Poornima Sanjay Prabhu 13. The evidentiary record, however, tells an entirely different story. The entire investment has, in fact, been made solely by the assessee

Femina Concept Marketing & Retail Trading (Textiles) Co Private Limited, Thane vs. Income Tax Officer, Ward 5(1)(1), Mumbai

Appeal is allowed for statistical purposes

ITA 6940/MUM/2024[2014-15]Status: DisposedITAT Mumbai30 Sept 2025AY 2014-15

Bench: Ms. Kavitha Rajagopal & Smt. Renu Jauhri

For Appellant: Shri Ravi GantraFor Respondent: Shri Vivek Perampurna (Sr. DR)

Section 147Section 250Section 250(4)Section 56(2)(x)Section 69

Commissioner of Income Tax (Appeals) erred in not deleting addition of Rs 6,03,93,900/- u/s 69 as unexplained Investment made in the assessment order passed by the AO u/s 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961. 2. On the facts and in the circumstances ... Commissioner of Income Tax (Appeals) erred in not deleting addition of Rs 6,03,93,900/- made by the Assessing Officer on account of unexplained investment in purchase of immovable property only on the basis of information available on Individual Transaction System/AIR information in ITBA AIMS system and Assessing Officer

Gulshan Homes and Infrastructure (P) Ltd, New Delhi vs. Dr. Manoj Kumar, DCIT, Central Circle-31, New Delhi

ITA 1595/DEL/2025[2020-21]Status: DisposedITAT Delhi30 Sept 2025AY 2020-21

Bench: Shri Vikas Awasthy & Shri M. Balaganesh

For Appellant: Revenue byFor Respondent: Shri Vinod Bindal, CA

Section 153C

objective satisfaction on the part of the AO of another person by recording a definite finding that cash has been exchanged to supress unexplained investments. No addition whatsoever has been made in the hands of the assessee for suppression of unexplained investments by the Learned AO in the assessment framed

Suman Lata, Noida vs. ITO, Ward-3(2), Noida

In the result, the case remanded back to CIT(A)

ITA 4919/DEL/2024[2012-13]Status: DisposedITAT Delhi30 Sept 2025AY 2012-13

Bench: Shri Anubhav Sharma & Shri Krinwant Sahayasstt. Yr: 2012-13

Section 68

channel and the identity of lender was also proved, the Ld CIT (A) has erred in upholding the addition of the said loan as unexplained investment. 3. That having regard to the fact that the assessee has produced the Bank Statement of the lender showing the transaction ... time of hearing.” 2. The sole effective ground raised in this case is the addition of Rs. 21 lakh made by the AO as unexplained investment which in turn has been affirmed by the ld. CIT(Appeals) in lower appellate proceedings. 3. In assessment proceedings the Assessing Officer made addition

Man Mohan Agarwal, Meerut vs. DCIT, Central Circle, Ghazaibad

In the result, appeal of the assessee is partly allowed

ITA 1214/DEL/2024[2017-18]Status: DisposedITAT Delhi30 Sept 2025AY 2017-18

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year : 2017-18] Man Mohan Agarwal, Vs Dcit/Acit, 1/8, Shri Laxmi Lok, New Central Circle, Mohanpuri, Sarrafa Bazar, Ghaziabad. Meerut, U.P-250002. Pan-Acapa1883B Appellant Respondent Appellant By Shri Shiv Kumar Gupta, Ca Respondent By Shri Mukesh Jha, Cit Dr Date Of Hearing 03.07.2025 Date Of Pronouncement 30.09.2025 Order Per Manish Agarwal, Am :

Section 132Section 133(6)Section 143(3)Section 250

page 55 containing the details of the amount contributed by the assessee towards the monthly lottery which was held as unexplained investment by the AO u/s 69A of the Act. 26. Before us, Ld.AR submits that this paper contained the details of monthly contribution made by the assessee

Fragment Nivesh P.Ltd, New Delhi vs. ACIT, Central Circle-13, New Delhi

In the result, both the appeals of the assessee are allowed

ITA 572/DEL/2019[2015-16]Status: DisposedITAT Delhi30 Sept 2025AY 2015-16

Bench: Shri M Balaganesh & Shri Vimal Kumarassessment Year: 2015-16 M/S. Enormous Nivesh Pvt. Vs. Assistant Commissioner Of Ltd., 1, Zamrudpur Community Income Tax, Central Circle Centre, Kailash Colony, 13, Ara Centre, New Delhi – 1100 48 Jhandewalan Extension, Pan No. Aabcd1454F Delhi -1100 55 (Appellant) (Respondent) Assessment Year: 2015-16 M/S. Fragment Nivesh P. Ltd., Vs. Assistant Commissioner Of 1, Zamrudpur Community Income Tax, Central Circle Centre, Kailash Colony, 13, Ara Centre, New Delhi – 1100 48 Jhandewalan Extension, Pan No. Aaecs5314G Delhi -1100 55 (Appellant) (Respondent)

For Appellant: Shri Manoj Kataruka, AdvFor Respondent: Shri Kumar Avikal Manu, CIT - DR

Section 142(1)Section 143(2)Section 143(3)Section 250(6)Section 56(2)

circumstances of the case the action of the Ld.CIT(A) to confirm the addition made by the A.O. of Rs.89,29,195/- as unexplained investments on the reason that the Sundry Debtors are fictitious is contrary to the settled principles of law and the addition is arbitrary, excessive and illegal ... circumstances of the case the action of the Ld.CIT(A) to confirm the addition made by the A.O. of Rs.69,81,290/- as unexplained investments on the reason that the Sundry Debtors are fictitious is contrary to the settled principles of law and the addition is arbitrary, excessive and illegal

Enormous Nivesh P.Ltd, New Delhi vs. ACIT, Central Circle-13, New Delhi

In the result, both the appeals of the assessee are allowed

ITA 570/DEL/2019[2015-16]Status: DisposedITAT Delhi30 Sept 2025AY 2015-16

For Appellant: Shri Manoj Kataruka, AdvFor Respondent: Shri Kumar Avikal Manu, CIT - DR

Section 142(1)Section 143(2)Section 143(3)Section 250(6)Section 56(2)

Dy. Commissioner of Income-Tax, International Taxation, Jaipur vs. Bharat Kumar Manghnani, Jaipur

In the result, appeal of the revenue is dismissed

ITA 872/JPR/2025[2018-19]Status: DisposedITAT Jaipur29 Sept 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Mrs. Suhani Meharwal, C.AFor Respondent: Mrs. Alka Gautam, CIT-DR

Section 142(1)Section 148Section 151Section 250Section 69Section 69A

remained unexplained and thus the AO added the same to the total income of the assessee on account of unexplained investment under section 69 of the IT Act, 1961. Further, it is also mentioned by the AO in the assessment order that the assessee had account balance ... Department was not given an opportunity to examine the evidence is factually incorrect and untenable in law. Ground No. 1.3 : Addition under Section 69 – Unexplained investment in FDRs  The ld. CIT (A) has dealt with the addition in detail in paragraph 8 of his order.  In para

Sh. Nasruddin, Kota vs. ITO, Ward-2(1), Kota

Appeal is allowed and the impugned order passed by

ITA 716/JPR/2025[2016-17]Status: DisposedITAT Jaipur29 Sept 2025AY 2016-17

Bench: Us

For Appellant: Shri P.C.Parwal, C.AFor Respondent: Shri Gautam Singh Choudhary, Addl. CIT

Section 147Section 148Section 148ASection 153Section 153C

assessee, challenging assessment order dated 19.04.2023, has been dismissed, thereby upholding the only addition of Rs. 6,81,750/-, made due to unexplained investment made by the assessee. 2 Sh. Nasruddin, Kota. 2. Arguments heard. File perused. Contentions 3. The only contention raised by the Ld. AR for the appellant