“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

The ACIT, Cen. Cir.-2, Rajkot vs. Expert Particle Board, Morbi

In the result, cross objection filed by the assessee, ( in CO No

ITA 139/RJT/2021[2019-20]Status: DisposedITAT Rajkot29 Aug 2025AY 2019-20

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं /.Ita No.139/Rjt/2021 िनधा"रणवष"/ Assessment Year: 2019-2020 Asstt.Commissioner Of Income-Tax Expert Particle Board बनाम Cent.Cir.2, Rajkot. Survey No.111, 8-A National Vs. Highway B/H. Bharatinagar Iti, Ravapar Nadi Morbi 363 642. Pan : Aahfe 0299 G आयकर अपील सं /.Ita No.142/Rjt/2021 With Cross Objection No.05/Rjt/2022 िनधा"रणवष"/ Assessment Year: 2019-2020 Asstt.Commissioner Of Income-Tax Bhagvaji Prabhubhai बनाम Cent.Cir.2, Rajkot. Amrutiya, Meera Park-2 Vs. House No.1, Vavdi Road Morbi. Pan : Aiwpa 0121 A (अपीलाथ"/Assessee) : (""यथ"/Respondent) िनधा"रती क" ओर से/Assessee By : Shri Mehul Ranpura, Ld.Ar राज"व क" ओर से/Revenue By : Shri Sanjay Punglia, Ld.Cit-Dr सुनवाई क" तार"ख /Date Of Hearing : 05/06/2025 घोषणा क" तार"ख /Date Of Pronouncement : 29/08/2025 Order Per, Dr. Arjun Lal Saini: The Captioned Two Appeals Filed By The Revenue Pertaining To Assessment Year 2019-20 & The Cross Objection Filed By The Assessee, Are Directed Against The Separate Orders Passed By The Learned Commissioner Of Income-Tax

For Appellant: Shri Mehul Ranpura, ld.ARFor Respondent: Shri Sanjay Punglia, ld.CIT-DR

Section 133ASection 143(3)Section 37Section 69ASection 69B

case and in law, learned Commissioner (Appeals) erred in deleting the addition of Rs. 1,48,89,125/-made on account of unexplained investment u/s 69B of the I.T. Act. 5.On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in ignoring ... this connection, we in addition to our earlier replies in the same issue further submit as under: As regard the allegation of unexplained investment in land of Rs. 1,48,89,125/- on the basis of alleged Satakhat (agreement) impounded during the survey action carried out at the office

Sandhya Vitthalrao Dabre, Nagpur vs. ITO Ward 1(2), Nagpur

In the result, the Assessee’s appeal is allowed

ITA 322/NAG/2025[2013-14]Status: DisposedITAT Nagpur29 Aug 2025AY 2013-14

Bench: Shri Narender Kumar Choudhryassessment Year: 2013-14

For Appellant: Ms. Mugdha Gangane, Ld. AdvFor Respondent: Shri Surjit Kumar Saha, Ld. CIT D.R

Section 147Section 250Section 69A

circumstances of the case 3 Ms. Sandhya Vitthalrao Dabre and submissions of the Assessee ultimately made the addition of Rs.18,00,000/- being unexplained investment u/s 69A of the Act. 5. The Assessee, being aggrieved, challenged the aforesaid addition as well as reopening of the proceedings

Kobsai Hospitallities Pvt. Ltd., Lucknow vs. Income Tax Officer, Ward-4(1), Lucknow

In the result, ITA No.290/LKW/2025 is allowed for statistical purposes while

ITA 291/LKW/2025[2013-14]Status: DisposedITAT Lucknow29 Aug 2025AY 2013-14

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

For Appellant: Sh. Rakesh Garg, AdvocateFor Respondent: Sh. Neeraj Kumar, CIT DR

Section 144Section 148Section 271(1)(c)Section 275(1)(a)Section 69

grounds of appeal, the addition of Rs.4,66,95,000/- made under section 69 of the Act by the Assessing Officer on account of unexplained investment in the properties, is contrary to the facts, bad in law be deleted. 08. Because the authorities below have failed to appreciate, that ... made through banking channels, recorded in the books of account, the provisions of section 69 are not applicable, the addition made on account of unexplained investment being contrary to the provisions of law, the same be deleted.” “01. Because the CIT(A), NFAC, has erred on facts

Kobsai Hospitalities Pvt. Ltd., Lucknow vs. Income Tax Officer, Ward-4(1), Lucknow

In the result, ITA No.290/LKW/2025 is allowed for statistical purposes while

ITA 290/LKW/2025[2013-14]Status: DisposedITAT Lucknow29 Aug 2025AY 2013-14

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

For Appellant: Sh. Rakesh Garg, AdvocateFor Respondent: Sh. Neeraj Kumar, CIT DR

Section 144Section 148Section 271(1)(c)Section 275(1)(a)Section 69

Nilesh Rameshchandra Sarvaiya, Mumbai vs. ITO Ward 23(2)(6), Mumbai

In the result, the Assessee’s appeal is allowed for statistical purposes

ITA 3164/MUM/2025[2018-19]Status: DisposedITAT Mumbai29 Aug 2025AY 2018-19

Bench: Shri Narender Kumar Choudhry & Shri Omkareshwar Chidaraassessment Year: 2018-19

For Appellant: Shri Dharmesh Shah, Ld. A.RFor Respondent: Shri Leyaqat Ali Aafaqui, Ld. D.R

Section 144Section 250Section 251(1)(a)Section 251(2)Section 56(2)(x)Section 69

vide assessment order dated 23.04.2021 u/s 144 r.w.s. 144B of the Act, has made the additions of Rs.5,00,000/- on account of unexplained investment u/s 69 of the Act and Rs.45,91,500/- on account of income from other sources

Sheetal Sameer Chaphekar, Mumbai vs. Income Tax Officer 31(2)(1), Mumbai

ITA 2011/MUM/2025[2017-2018]Status: DisposedITAT Mumbai29 Aug 2025AY 2017-2018

Bench: Shri Narender Kumar Choudhry & Shri Omkareshwar Chidaraassessment Year: 2017-18

For Appellant: Shri Asish Thakurdesai, Ld. A.RFor Respondent: Shri Leyaqat Ali Aafaqui, Ld. D.R

Section 250Section 69

Officer (AO) dated 25.05.2023 due to non-compliance by the Assessee, vide assessment order ultimately made the addition of Rs.1,25,00,000/- as unexplained investment u/s 69 of the Act mainly on the reason that the Assessee during the assessment year under consideration had purchased an immovable property

Aakash Developers, Thane vs. ACIT, Circle 1, Thane

In the result the appeal filed by the assessee stands allowed

ITA 1767/MUM/2025[2010-11]Status: DisposedITAT Mumbai29 Aug 2025AY 2010-11

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 132(4)Section 143(3)Section 147Section 148

required to be struck down on that count. 2. The Hon CIT(A) erred in upholding addition of Rs.45,00,000/- as unexplained investment on account of alleged cash on-money paid for purchase of flat no. 3, PH-2, Bloc KD, Cosmos Hawaiian, Thane (W) from Cosmos Group

Gulshan Lal, Gurgaon vs. ITO Ward-1(5), Gurgaon

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

ITA 1188/DEL/2025[2016-17]Status: DisposedITAT Delhi29 Aug 2025AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishraita No.1188/Del/2025, A.Y. 2016-17 Gulshan Lal, Income Tax Officer, Khandsa Road, Sector -10, Ward-1(5), Gurgaon Vs. Income Tax Office, Pan: Abzpl7258D Udyog Vihar, Gurgaon (Appellant) (Respondent) Appellant By None Respondent By Sh. Dheeraj Kumar Jain, Sr. Dr Date Of Hearing 26/08/2025 Date Of Pronouncement 29/08/2025 Order Per Avdhesh Kumar Mishra, Am The Appeal For The Assessment Year (‘Ay’) 2016-17 Filed By The Assessee Is Directed Against The Order Dated 19.12.2024 Of The Commissioner Of Income Tax (Appeals), Nfac [‘Cit(A)’].

Section 144Section 144ASection 69ASection 69C

erred in upholding the addition made by the Ld. AO of Rs. 1,52,70,000/- u/s 69A of the Act on account of Unexplained Investment in Property. 4. That having regards to the facts and circumstances of the case, the Ld. CIT(A) erred in upholding the addition made ... assessment on 13/12/2018 u/s. 144, where in addition to the returned income of Rs. 8,90,990/-, additions were made on account of Unexplained Investment in property for Rs. 1,52,70,000/- and an unsubstantiated amount of sundry creditor for Rs. 3,70,99,544/-. 2.2. Aggrieved with

Shubham Yadav L/H Vijay Pal Yadav, Meerut vs. ITO, Ward-1(2)(4), Meerut

In the result, both appeals of the assessee is allowed for statistical purposes

ITA 1076/DEL/2025[2017-18]Status: DisposedITAT Delhi29 Aug 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishraita No.1075 & 1076/Del/2025, A.Ys. 2012-13 & 2017-18 Shubham Yadav Income Tax Officer, L/H Of Vijay Pal Yadav, Ward-2(4), 145, B.C. Lines, Vs. Aaykar Bhawan, Meerut- 250001 Bhainsali Ground, Meerut, Pan: Aaapy8828J Uttar Pradesh (Appellant) (Respondent) Appellant By Sh. Raj Kumar, Advocate Respondent By Sh. Gouranga Chandra, Sr. Dr Date Of Hearing 27/08/2025 Date Of Pronouncement 29/08/2025 Order Per Avdhesh Kumar Mishra, Am Common Facts & Similar Grounds Arise In The Above Captioned Appeals Of The Assessee; Therefore, These Appeals Were Heard Together & Are Being Disposed Off By This Common Order.

Section 144Section 147Section 148

reopened under section 148 of the Income Tax Act, 1961 (‘Act’) on the reasoning of escapement of income on account of capital gains and unexplained investments. But the assessee failed to ensure any compliance of statutory notices; therefore, the AO had no option except to complete the assessment ex parte ... taken by the appellant relate to the action of the Ld. AO regarding addition of Rs.80,00,000/- on STCG and Rs.1,19.68.485/-as Unexplained Investment on property of Income Tax Act. 1961. 4.2. This case was initially fixed for hearing on 24.02 2021 by a notice dated

Shubham Yadav L/H of Vijay Pal Yadav, Meerut vs. ITO, Ward-2(4), Meerut

In the result, both appeals of the assessee is allowed for statistical purposes

ITA 1075/DEL/2025[2012-13]Status: DisposedITAT Delhi29 Aug 2025AY 2012-13

Section 144Section 147Section 148

Harshit Kochar, New Delhi vs. ACIT Central Circle 17 New Delhi, Jhandewalan New Delhi

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

ITA 5072/DEL/2024[2017-18]Status: DisposedITAT Delhi29 Aug 2025AY 2017-18

Bench: Shris.Rifaur Rahman & Shri Vimal Kumarharshit Kochar, Vs. Acit, Central Circle 17, 5, Kasturba Gandhi Marg, New Delhi. New Delhi – 110 001. (Pan : Amypk0228N) (Appellant) (Respondent) Assessee By : Shri Gautam Jain, Advocate Shri Parth Singhal, Advocate Revenue By : Shri Dayainder Singh Sidhu, Cit Dr Date Of Hearing : 04.06.2025 Date Of Order : 29 .08.2025 O R D E R Per S.Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)-27, New Delhi [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 06.10.2023 For Assessment Year 2017-18 Raising Following Grounds Of Appeal :- “1. That The Learned Lower Authorities Have Erred In Nor Appreciating Either On The Fact Or Circumstance, Of The Case & Further Has Erred In Upholding The Addition Of Rs.21,26,142/- U/S 69A R.W.S, 115Bbe Of The Act Which Is Bad In Law.

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR

Section 127Section 132Section 143(2)Section 69A

Rs.21,26,142/- u/s 69A r.w.s, 115BBE of the Act out of the total addition of INR 92,37,000 made on the alleged unexplained investments in the wrist watches. 2.1 That the learned lower authorities went in appreciating the submissions of the appellant that search operation was carried ... absence of any evidence to suggest that any expenses haw been incurred on purchase of watches. any adverse inference drawn regarding unexplained investment and that too in the hands of the appellant and also for the instant assessment year is not in accordance with law and untenable. 2,3 That

Jai Prakash Virmani, Faridabad vs. Dc ACIT Cent Faridabad 2 New, Faridabad

In the result, the appeal of the assessee is allowed

ITA 4764/DEL/2024[2019-20]Status: DisposedITAT Delhi29 Aug 2025AY 2019-20

Bench: Shri Sudhir Kumar & Shri Manish Agarwaljai Prakash Virmani, Dcit/Acit, Shop No.7, Sector 58, Central Circle, Faridabad, Haryana-121004 Vs. Faridabad. Pan-Ahrpp4614R (Appellant) (Respondent) Assessee By Shri M.K. Gupta, Ca Department By Shri Om Prakash, Sr. Dr Date Of Hearing 21/08/2025 Date Of Pronouncement 29/08/2025 O R D E R [ Per Manish Agarwal, Am: This Appeal Is Filed By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)-3, Gurgaon [Cit(A) In Short], Dated 04.09.2024 In Appeal No.10863/2018-19 Passed U/S 250 Of The Income Tax Act, 1961 (The Act, In Short) For Asst. Year 2019-20. 2. Brief Facts Of The Case Are That The Survey U/S 133A Was Carried Out At The Business Premises Of The Assessee On 23.01.2019. During The Course Of Survey Certain Loos Papers Were Found & Impounded Having Entries Of Cash Withdrawals & The Undisclosed Expenditure On Constructions Of House, Besides Other Documents Were Also Found Jai Prakash Virmani Vs. Dcit /Acit & Impounded. Based On These Entries Assessee Had Offered Additional Income In The Statements Recorded During The Course Of Survey Of Rs.1,28,34,958/-. Thereafter, Vide Letter Dated 20.01.2020, The Assessee Retracted Partly From The Additional Income So Offered During The Survey. The Case Of The Assessee Was Taken Up For Scrutiny & Assessment Was Completed Wherein The Ao Observed That Income Offered By The Assessee Towards Unexplained Investment In The Construction Of House Is Taxable U/S 69 Of The Act. The Ao Further Observed That The Provisions Of Section 115Bbe Are Applicable On The Income Of Rs.17,66,380/- Offered By The Assessee On Account Of Undisclosed Investment In Constructions House.

Section 115BSection 133ASection 234BSection 250Section 69

case of the assessee was taken up for scrutiny and assessment was completed wherein the AO observed that income offered by the assessee towards unexplained investment in the construction of house is taxable u/s 69 of the Act. The AO further observed that the provisions of section 115BBE are applicable ... income of Rs. 17,66,380/- u/s 69 and charging tax thereon u/s 115BBE of the Act, stating that the said amount was an unexplained investment. 2. That the Ld. CIT(A) erred in confirming the addition completely ignoring the facts that investment for house construction

DCIT, CC-06, New Delhi vs. Jatin Madani, Delhi

The appeal of the Revenue is dismissed

ITA 2033/DEL/2021[2015-16]Status: DisposedITAT Delhi29 Aug 2025AY 2015-16

Bench: SHRI ANUBHAV SHARMA (Judicial Member), SHRI AMITABH SHUKLA (Accountant Member)

For Appellant: Shri Mayank Patawari, Advocate &For Respondent: Ms Monika Singh, CIT-DR

Section 147Section 148Section 149Section 150Section 153ASection 68Section 69

erred in law and on facts in deleting the Addition of Rs.10,00,000/- made on account of unexplained investment u/s 69 r.w.s. 115BBE of the Act by holding that no incriminating material was seized nor any statement on oath was recorded in the premises of the assessee during search ... account of alleged cash commission earned from supposed cash transportation activity, alleged commission earned for facilitating accommodation entries and on account of alleged unexplained investments in the assessment orders passed u/s 153A of the IT Act, 1961 though no incriminating document was found during the course of search

ACIT, New Delhi vs. M/S Worldlink Telecom Ltd., New Delhi

In the result, the appeal of the revenue for assessment year 2004-05 is dismissed and appeal for assessment year 2006-07 is partly allowed

ITA 2596/DEL/2017[2006-07]Status: DisposedITAT Delhi29 Aug 2025AY 2006-07

Bench: Shri M. Balaganesh & Shri Vimal Kumar

For Appellant: Shri Amol Sinha, AdvFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR

Section 147Section 68

shares of GFSPL than the available stock of those shares and accordingly the excess stock of 84960 shares valued at ₹100 were treated as unexplained investment in the sum of ₹84,96,000/- u/s 69 of the Act. The assessee submitted before the ld CIT(A), the chart of details

ACIT, New Delhi vs. M/S Worldlink Telecom Ltd., New Delhi

In the result, the appeal of the revenue for assessment year 2004-05 is dismissed and appeal for assessment year 2006-07 is partly allowed

ITA 2595/DEL/2017[2004-05]Status: DisposedITAT Delhi29 Aug 2025AY 2004-05

Bench: Shri M. Balaganesh & Shri Vimal Kumar

For Appellant: Shri Amol Sinha, AdvFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR

Section 147Section 68

Goenka Trading Company, Annupur vs. ACIT Central Circle, Jabalpur

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

ITA 106/JAB/2025[2020-21]Status: DisposedITAT Jabalpur28 Aug 2025AY 2020-21

Bench: Shri Anadee Nath Misshra

Section 143(3)

short) and determined the total income of the assessee at Rs.27,50,120/- by making addition of Rs.20,06,437/- on account of unexplained investment and Rs.5,783/- on account of unexplained money. Being aggrieved, the assessee filed appeal in the office of learned CIT(A). Vide impugned order dated

Pawan Sthapak, Jabalpur vs. ACIT Central Circle, Jabalpur

In the result, appeals of the assessee are allowed for

ITA 105/JAB/2025[2017-18]Status: DisposedITAT Jabalpur28 Aug 2025AY 2017-18

Bench: Shri Kul Bharat & Shri, Nikhil Choudhary

For Appellant: Shri Sapan Usrethe, AdvFor Respondent: Shri Alok Bhura, Sr. CIT(DR)

Section 129Section 148Section 151Section 69B

confirming the addition of Rs. 99,02,248 without appreciating that the assessing officer erred in making the addition of Rs.99,02,248 as unexplained investment under section 69B without rejecting the books of accounts and without bringing any material or evidence which shows that appellant have invested more than ... addition of Rs.1,87,70,395 without appreciating that the assessing officer erred in making the addition of Rs. 1,87,70,395 as unexplained investment under section 69B without rejecting the books of accounts and without bringing any material or evidence which shows that appellant have invested more than

Pawan Sthapak, Jabalpur vs. ACIT Central Circle, Jabalpur

In the result, appeals of the assessee are allowed for

ITA 104/JAB/2025[2016-17]Status: DisposedITAT Jabalpur28 Aug 2025AY 2016-17

Bench: Shri Kul Bharat & Shri, Nikhil Choudhary

For Appellant: Shri Sapan Usrethe, AdvFor Respondent: Shri Alok Bhura, Sr. CIT(DR)

Section 129Section 148Section 151Section 69B

Deputy Commissioner of Income Tax, Guwahati vs. Sankha Press Pvt Ltd, Guwahati

ITA 127/GTY/2025[2017-18]Status: DisposedITAT Guwahati28 Aug 2025AY 2017-18

Bench: Shri Rajesh Kumar, Am & Shri Manomohan Das, Jm

For Appellant: Shri Soumitra Choudhury, ARFor Respondent: Shri Kaushik Ray, DR

Section 69C

been purchased, for Rs. 4,54,25,586/-. The AO also held that the related expenses of Rs. 1,89,15,088/- was also Unexplained Investment of the assessee for impot of goods. During the appeal, the assessee submitted a clarificatory letter, issued by the Poddar Global Ltd. on 09/08/2019

Deputy Commissioner of Income Tax, Guwahati vs. Sankha Press Pvt Ltd, Guwahati

ITA 126/GTY/2025[2016-17]Status: DisposedITAT Guwahati28 Aug 2025AY 2016-17

Bench: Shri Rajesh Kumar, Am & Shri Manomohan Das, Jm

For Appellant: Shri Soumitra Choudhury, ARFor Respondent: Shri Kaushik Ray, DR

Section 69C