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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

DCIT, Central Circle 2(3), Chennai vs. Rathinam Prabakaran, Karur

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

ITA 1154/CHNY/2024[2015-16]Status: DisposedITAT Chennai29 Sept 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.1154/Chny/2024 िनधा9रण वष9 /Assessment Year: 2015-16 The Dy. Commissioner Of Rathinam Prabakaran, Income Tax, Vs. 39, Narasimmapuram North, Central Circle-2(3), Karur - 639 001. Chennai. [Pan: Aaipp 4501B]

For Appellant: Shri N. V. Balaji, AdvocateFor Respondent: Ms. R. Anita, Addl. CIT
Section 147Section 148Section 153CSection 69

loan of Rs.2 Crores advanced during the previous year relevant to A.Y 2015-16. The A.O therefore made addition of Rs. 2 Crores as unexplained investment u/s. 69 of the Act. Aggrieved by the same, the assessee filed an appeal before the Ld. CIT(A) disputing the addition

Assistant Commissioner of Income Tax, Circle-2(2)(1), Bangalore vs. Embassy Rr Projects Private Limited, Bangalore

ITA 931/BANG/2025[2022-23]Status: DisposedITAT Bangalore29 Sept 2025AY 2022-23

Bench: Shri Waseem Ahmed & Shri Soundararajan Kassessment Year: 2022-23

For Appellant: Shri Deepesh Wagle, CAFor Respondent: Shri Shivanand Kalakeri, CIT (DR)
Section 133(6)Section 69

mismatched and that no reliable evidence or confirmation was furnished. The AO thus proposed to treat the sum of ₹69 crores as an unexplained investment under section 69 of the Act through show cause notice dated 6th March 2024. 7. In response, the assessee clarified that the PAN provided

Ashwini Mysore Sathya Kumar, Bengaluru vs. Income Tax Officer, Ward- 5(3)(2), Bengaluru

The appeal of the assessee is allowed

ITA 1660/BANG/2025[2017-18]Status: DisposedITAT Bangalore29 Sept 2025AY 2017-18

Bench: Shri Prashant Maharishiassessment Year : 2017-18

For Appellant: Shri Pradeep Bhat, CAFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for the Revenue
Section 133Section 139Section 142Section 144Section 69

show cause notice was also issued u/s. 144 of the Act that why the above sum of Rs.2 lakhs should not be treated as unexplained investment under section 69 of the Act. Accordingly the assessment order was passed on 17/12/2019. Page 3 of 5 4. The assessee aggrieved with

Income Tax Officer, Ward-1, Hassan vs. Prathamika Krushi Pattina Sahakara Sanga Niyamitha Kenchammanahosakote, Hosakorte Post, Alur Taluk

In the result, the appeal filed by the revenue as well as the cross objection filed by the assessee are dismissed

ITA 2382/BANG/2024[2018-19]Status: DisposedITAT Bangalore29 Sept 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2018-19

For Appellant: Shri Tharun Kothari, CAFor Respondent: Shri Subramanian .S, JCIT-DR
Section 148Section 148ASection 69A

District Central Co-operative Bank to the various accounts for distributing the said amount to the members of the society would not be an unexplained investment u/s. 69A of the Act. Before the Ld.CIT(A), the assessee explained about the bank accounts and the mode of cash deposits into ... collections made from the members and later on deposited into the bank accounts and therefore it could not be treated as an unexplained investment u/s. 69A of the Act. The Ld.AR further submitted that the assessee is having a single current account for their operations and the other accounts maintained

Shri Vibhu Grover, Kotdwara vs. PCIT, Dehradun

In the result appeal of the assessee is allowed

ITA 110/DDN/2024[2015-16]Status: DisposedITAT Dehradun26 Sept 2025AY 2015-16

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwalvibhu Grover, Pcit, M/S Grover Sales Corporation, Dehradun. Garage Road, Kotdwara, Vs. Pauri-246169 Pan:Agdpg5842R (Appellant) (Respondent) Assessee By Shri Anil Jain, Adv. Department By Shri S.K. Chaterjee, Cit-Dr

Section 142(1)Section 147Section 148Section 263

reported in [2021] 130 taxmann.com 294 (SC) has held as under:- “Section 69, read with section 263, of the Income-tax Act, 1961 - Unexplained investments (Unsecured loans) - Assessment year 2013-14 - Assessee-company had received unsecured loans from two different companies - Commissioner noting that said loans were shown as investment

Kantibhai Dhirubhai Gajera, Surat vs. ITO, Ward 3(3)(3), Surat

ITA 950/SRT/2024[2016-17]Status: DisposedITAT Surat26 Sept 2025AY 2016-17

Bench: Shri Dinesh Mohan Sinha& Shri Bijayananda Prusethआयकरअपीलसं./Ita No.950/Srt/2024 Assessment Year: 2016-17 (Hybrid Hearing) Kantibhai Dhirubhai Gajera Income Tax Officer, Ward-3(3)(1), बनाम/ 12, Gandhivihar Society, L H Surat, Aayakar Bhawan, Majura Vs. Road, Varachha, Surat- 395 Gate, Surat-395 001 006 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Adopg3063E (अपीलाथ"/Appellant) (""थ"/Respondent)

Section 143(3)Section 250Section 69

action of AO in ITA No.950/SRT/2024 A.Y 16-17 Kantibhai D Gajera making addition u/s.69 of the Act of Rs.98,29,500/- as unexplained investment. 2. On the facts and circumstances of the case as well as the law on the subject, the Ld. CIT(A), NFAC, has erred

Anil Radheshyam Sharma, Surat vs. ITO, Ward 2(3)(1), Surat

In the result, the appeal of the assessee is partly allowed

ITA 888/SRT/2024[2011-12]Status: DisposedITAT Surat26 Sept 2025AY 2011-12

Bench: Shri Siddhartha Nautiyal & Shri Bijayananda Prusethआयकर अपील सं./Ita No.888/Srt/2024 Assessment Year: 2011-12 (Hybrid Hearing) Anil Radheshyam Sharma, Income Tax Officer, Ward – बनाम/ 73, Shyamal Dham Row 2(3)(1), Surat Vs. House, Godadara, Surat – 395 012 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Bdhps8135D (""थ"/Respondent) (अपीलाथ"/Appellant)

Section 139(1)Section 143(2)Section 143(3)Section 148Section 250Section 44A

jurisdictional High Court held that in absence of any material on record to show that there was any unexplained investment made by the assessee which was reflected by the alleged unaccounted sales, only the gross profit on the said amount can be brought to tax. 8.4 In the present case

Labhu Balubhai Ghevariya, Surat vs. ITO, Ward 3(2)(4), Surat

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

ITA 809/SRT/2024[2016-17]Status: DisposedITAT Surat26 Sept 2025AY 2016-17

Bench: Shridinesh Mohan Sinha& Shri Bijayananda Prusethआयकरअपीलसं./Ita No.809/Srt/2024 Assessment Year: 2016-17 (Hybrid Hearing) Labhu Balubhai Ghevariya Income Tax Officer बनाम/ 3, Ila Park Society Opp. Ward—3(2)(4), Surat Aayakar Vs. Katargam Police Station, Bhavan, Majura Gate, Surat-395 Katargam, Surat-395004 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Akdpp0165A (अपीलाथ"/Appellant) (""थ"/Respondent) "नधा"रतीक"ओरसे/Appellant By Shri P.M. Jagasheth, Ca राज"वक"ओरसे /Respondent By Shriajay Uke, Sr. Dr सुनवाई क" तार"ख/Date Of Hearing 28/07/2025 उ"घोषणा क" तार"ख/Date Of Pronouncement 26/09/2025

Section 142(1)Section 143(2)Section 143(3)Section 250Section 271(1)(c)Section 54BSection 69

confirming the action of Assess0ng Officer in making addition of Rs.84,87,825/- on account of alleged for purchasing agriculture land treated as unexplained investment u/s.69 of the Income-tax Act, 1961. 3. On the facts and in the circumstances of the case as well ... addition total income of assessee of Rs.9,26,110/- on account of capital gains and another addition of Rs.84,27,825/- on account of unexplained investment, thereby assessing total income of the assessee at Rs.99,64,865/-. 3. Aggrieved by the addition made by AO, assessee preferred appeal before

Malladi Panduranga Parameswara Rao, Kakinada vs. Income Tax Officer, Kakinada

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

ITA 407/VIZ/2025[2016-17]Status: DisposedITAT Visakhapatnam26 Sept 2025AY 2016-17

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: NoneFor Respondent: Dr. Aparna Villuri, DR
Section 147

through the impugned order of the Ld. CIT(A), at the outset, we note that the Assessing Officer has made addition on account of unexplained investment in the property as well as deposits in the bank account of the assessee along with undisclosed income from capital gains while passing

Rahul Gupta, Hardoi vs. ITO, Ward 3(), Hardoi

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

ITA 197/LKW/2022[2017-18]Status: DisposedITAT Lucknow26 Sept 2025AY 2017-18

Bench: SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY (Accountant Member)

For Appellant: Sh. Pranav Pandey, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 115BSection 142(1)Section 144Section 69ASection 69o

hands only. 3. The ld. CIT(A) erred on facts and in laws in confirming the addition of Rs.7,66,500/- as unexplained investments u/s 69of the I.T. Act, 1961. 1 Rahul Gupta A.Y. 2017-18 4. The Id. CIT(A) erred on facts and in law in confirming

Dy. Commissioner of Income Tax, Central Circle-1, Auranagabad., Aurangabad vs. Navin Hanumanprasad Bagadiya, Aurangabad

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

ITA 990/PUN/2024[2014-15]Status: DisposedITAT Pune26 Sept 2025AY 2014-15

Bench: Dr.Manish Borad & Ms. Astha Chandra

For Appellant: Shri Amol KhairnarFor Respondent: Shri Abhay N. Agrawal
Section 132Section 143(2)Section 143(3)Section 153CSection 250Section 69Section 69A

case and in law, the Ld. CIT(A) has erred in law and facts by holding that addition made on account of unexplained investments u/s 69 amount to double taxation. 7. Whether on the facts and in the circumstances of the case

Rathi Gajendran, Tuticorin vs. ITO, Ward-1, Tuticorin

In the result, the grounds of appeal

ITA 1910/CHNY/2025[2015-16]Status: DisposedITAT Chennai26 Sept 2025AY 2015-16

Bench: Shri Ss Viswanethra Ravi & Shri Ratnesh Nandan Sahayrathi Gajendran, I.T.O., 138J, Ellayarasanendal Road Vs. Ward-2, Near Clubh, Kovilpatti Tuticorin. Thoothukudi-628501. Pan No. Birpr 3787 H Appellant/ Assessee Respondent/ Revenue

Section 148Section 148ASection 151Section 69

income tax return filed under Section 148 of the Act. The Assessing Officer also treated entire amount of Rs. 54,06,160/- as unexplained investment under Section 69 r.w.s. 115BBE of the Act. 3. Aggrieved by the order of Assessing Officer, the assessee preferred appeal before

Shanmugasundaram Venkatachalapathy, Tirunelveli, Tamilnadu vs. Income Tax Officer, Ward 4, Tirunelveli

In the result, grounds of appeal raised

ITA 2056/CHNY/2024[2017-18]Status: HeardITAT Chennai26 Sept 2025AY 2017-18

Bench: Shri Ss Viswanethra Ravi & Shri Ratnesh Nandan Sahayshri Shanmugasundaram I.T.O., Venkatachalapathy, Vs. Ward-4, C/O-Durv & Associates Llp, No. Tirunelveli. 10/80, Avm Avenue 3Rd Street, Virugambakkam, Chennai-600092 (Tamil Nadu) Pan No. Acapv 3414 B Appellant/ Assessee Respondent/ Revenue

Section 115BSection 143(2)Section 143(3)Section 147Section 234ASection 250Section 56(2)(vii)Section 69

extent it is prejudicial to the interest of the Appellant. Ground 2 to 8 Treatment of cash deposit of Rs. 69,56,295 as unexplained investment under section 69 of the Act. 2. That the Learned CIT(A) has erred in upholding the action of the Learned AO by treating ... unexplained investment under section 69 of the Act. 2 ITA2056/Chny/2024 Shri Shanmugaundaram Venkatachalapathy Vs ITO 3. That the Learned CIT(A) has erred in upholding the order of the Learned AO in treating the sum of Rs. 69,56,295 as unexplained investment without appreciating the fact that the Appellant

ACIT, Central Circle-2(4), Bangalore vs. Ramchandra Naveen, Bangalore

ITA 2083/BANG/2024[2018-19]Status: DisposedITAT Bangalore26 Sept 2025AY 2018-19

Bench: Shri. Laxmi Prasad Sahu & Shri. Keshav Dubey

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Shri. Subramanian S, JCIT(DR)(ITAT), Bangalore
Section 132(4)Section 153A

INCOME TAX APPELLATE TRIBUNAL "B" BENCH : BANGALORE BEFORE SHRI. LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI. KESHAV DUBEY, JUDICIAL MEMBER

ACIT, Central Circle-2(4), Bangalore vs. Ramchandra Naveen, Bangalore

ITA 2082/BANG/2024[2017-18]Status: DisposedITAT Bangalore26 Sept 2025AY 2017-18

Bench: Shri Laxmi Prasad Sahu & Shri. Keshav Dubey

For Appellant: Shri. V. Srinivasan, AdvocateFor Respondent: Shri. Subramanian S, JCIT(DR)(ITAT), Bangalore
Section 132(4)Section 153A

INCOME TAX APPELLATE TRIBUNAL "B" BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI. KESHAV DUBEY, JUDICIAL MEMBER

Tushar Suresh Tayshete, Mumbai vs. Income Tax Officer Ward 42(1)(5), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 4968/MUM/2025[2015-16]Status: DisposedITAT Mumbai26 Sept 2025AY 2015-16

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailtushar Suresh Tayshete, E-701, Ambika Darshan, C.P. Road, Kandivali East, Mumbai – 400101 ............... Appellant Pan : Aadpt9011H

For Appellant: Shri Abhishek ChoksyFor Respondent: Shri Vikas Chandra, Sr.DR
Section 142(1)Section 144BSection 148Section 2Section 250Section 3Section 69

erred in law and in fact in confirming addition of INR 9,70,000/- u/s. 69 of the Act on account of unexplained investment.” 3. The solitary issue that arises for our consideration is against the addition of Rs.9,70,000/- made under section

Ramesh Vishwakarma, Narsinghpur vs. Income Tax Officer Ward, Narsinghpur

In the result, the appeal of the assessee is allowed

ITA 194/JAB/2024[2017-18]Status: DisposedITAT Jabalpur25 Sept 2025AY 2017-18

Bench: Shri Kul Bharatassessment Year: 2017-18 Ramesh Vishwakarma V. Income Tax Officer H. No.175 Bhatera Gadarwara Ward, Narsinghpur Narsinghpur-487551. Trimurti Nagar Housing Borad Colony, Narsinghpur-487001, Madhya Pradesh. Pan:Aflpv6691L (Appellant) (Respondent) Appellant By: Shri Dhiraj Ghai, Ca Respondent By: Shri Alok Bhura, Sr. Cit(Dr) Date Of Hearing: 18 09 2025 Date Of Pronouncement: 25 09 2025 O R D E R

For Appellant: Shri Dhiraj Ghai, CAFor Respondent: Shri Alok Bhura, Sr. CIT(DR)
Section 142(1)Section 144Section 69

made an addition of Rs.10,00,000/- i.e. the amount deposited in the bank account of the assessee in cash treating the same as unexplained investment u/s 69 of the Act. Thus, the Assessing Officer assessed the income u/s 144 of the Act at Rs.10,00,000/-. Aggrieved by this

Bhavesh Jayanti Sondarwa, Mumbai vs. ITO Ward 19(1)(1), Mumbai

ITA 3009/MUM/2025[2017-18]Status: DisposedITAT Mumbai25 Sept 2025AY 2017-18

Bench: Shri Rahul Chaudhary (Jm) & Shri Omkareshwar Chidara (Am) Bhavesh Jayanti Sondarwa Ito Ward 19(1)(1) A/1, 6Th Floor, Room No. 603 Room No. 501 Samrat Ashok Chs, S.K. Vs. Piramal Chambers Rathod Marg, Ambedkar Lalbaug, Parel Nagar, Mahalaxmi Mumbai-400 012. Mumbai-400 034. Pan : Cnpps2949G Appellant Respondent

For Appellant: Shri Pravin SalunkheFor Respondent: Shri Navin Gandhi, CA
Section 147Section 148Section 148ASection 149(1)(a)Section 149(2)Section 56(2)(vii)Section 69

value of property shown in the document as purchase value and the value determined by State Government. The second addition relates to unexplained investment under section 69 of the Act. The Ld. CIT(A) upheld the additions made by Ld. AO for the reasons mentioned in his order. 2. Aggrieved

Pradip Gangadharrao Bhude, Nagpur vs. The Income Tax Officer, Ward - 3(4), Nagpur

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

ITA 59/NAG/2025[2013-2014]Status: DisposedITAT Nagpur24 Sept 2025AY 2013-2014

Bench: Shri Narender Kumar Choudhryassessment Year: 2013-14

For Appellant: Shri Manoj Moriyani, Ld. AdvFor Respondent: Shri Surjit Kumar Saha, Ld. Sr. D.R
Section 147Section 148Section 250Section 69

allowed to be run away from his burden to prove the genuineness of transactions”, ultimately made the addition of Rs.20,32,500/- being unexplained investment u/s 69 of the Act. 5. The Assessee though, being aggrieved, challenged the said addition by filing first appeal before the Ld. Commissioner, however, despite

Shaikh Sultan Shaikh Fakira, Amravati vs. ITO Ward -3, Amravati

In the result, the Assessee’s appeal i

ITA 384/NAG/2025[2017-18]Status: DisposedITAT Nagpur24 Sept 2025AY 2017-18

Bench: Shri Narender Kumar Choudhryita Nos.380, 381, 382, 383 & 384/Nag/2025 Assessment Years: 2013-14, 2014-15, 2015-16, 2016-17 & 2017-18

For Appellant: Smt Veena Agrawal, Ld. CA (AmicusFor Respondent: Shri Surjit Kumar Saha, Ld. Sr. D.R
Section 147Section 250Section 69A

Rs.7,88,020/- on account of unexplained income, Rs.30,725/- on account of interest earned from bank as unexplained and Rs.28,45,000/- unexplained investment u/s 69A of the Act. 8. The Assessee, being aggrieved, challenged the said additions before the Ld. Commissioner who by considering the peculiar facts