“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

Starpoint Vinimay Private Limited, Kolkata vs. Asst Commissioner of Income Tax (OSD) Ward-1(1), Kolkata

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

ITA 340/KOL/2025[2015-2016]Status: DisposedITAT Kolkata26 Aug 2025AY 2015-2016

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 143(3)Section 250Section 5

Income Tax Act, 1961 being investment in unlisted securities without appreciating that section 68 does not apply to unexplained investments and hence the addition of Rs 38,40,000/- may be deleted. 4) The Ld NFAC/CIT(A) erred confirming the addition

Veeranan Srinivasan, K.K.Nagar, Madurai vs. Deputy Commissioner of Income Tax, Non Corporate Circle-1, Madurai, Income Tax Office

ITA 1136/CHNY/2025[2017-2018]Status: DisposedITAT Chennai26 Aug 2025AY 2017-2018

Bench: Shri George George K & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1136/Chny/2025

Section 115BSection 132Section 143(3)Section 154Section 69B

closing balance as on 31.3.2016). This figure was reduced from the opening balance of Rs.86,67,857 and the addition to be considered as unexplained investment was computed at Rs.1,45,41,316. The returned income for A.Y.2016-17 was Rs.74,48,443 and this was adjusted against the addition computed ... Rs.4,02,84,551. This figure was actually to be reduced from the opening balance of Rs.2,32,09,173 to arrive at the unexplained investment of A.Y.2017-18. It was argued that instead, the Ld.AO erroneously reduced the income of A.y.2016-17 (i.e.. Rs.1,45,41,316) and arrived

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

The appeals of the assessee are disposed of as below:

ITA 2912/CHNY/2024[2018-2019]Status: DisposedITAT Chennai26 Aug 2025AY 2018-2019

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

2853/Chny/2024, 2911 to 2913/Chny/2024 assessment was completed by the AO vide order dated 30.09.2021 making the following additions: i. Unexplained investment in jewellery to the extent of Rs.9,58,885/-; and ii. Unexplained investment in immovable property of Rs.73,25,679/- 57. The facts relevant to the first issue ... explanation regarding the source of the said 389 grams of jewellery, valued at Rs.9,58,885/—. Consequently, the AO treated the same as unexplained investment. 59. Before the Id.CIT(A), the assessee contended that he hails from an affluent family, and considering his family background, the explanation ought to have

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2911/CHNY/2024[2017-2018]Status: DisposedITAT Chennai26 Aug 2025AY 2017-2018

Bench: Shri Aby T Varkey & Shri S. R. Raghunathaआयकर अपील सं./Ita Nos.: 2850,2851,2852 & 2853/Chny/2024, 2910, 2911 & 2912/Chny/2024 धनिाारण वर्ा / Assessment Years: 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 & 2018-19 Sundaram Sankar Anand, The Assistant Commissioner Of No.63-B-7, Mayanur, Vs Income Tax, M Kaspa Sandai Peatai, . Central Circle – 2, Coimbatore. Krishnarayapuram Taluk, Karur – 639 102 [Pan:Bvips-1149-E] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Shri. V. Alagappa, C.A. प्रत्यथी की ओर से/Respondent By : Mr. M.Murali, Cit (Virtual) सुनवाई की तारीख/Date Of Hearing : 25.06.2025 घोर्णा की तारीख/Date Of Pronouncement : 26.08.2025 आदेश /O R D E R Per S. R. Raghunatha, Am:

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

2853/Chny/2024, 2911 to 2913/Chny/2024 assessment was completed by the AO vide order dated 30.09.2021 making the following additions: i. Unexplained investment in jewellery to the extent of Rs.9,58,885/-; and ii. Unexplained investment in immovable property of Rs.73,25,679/- 57. The facts relevant to the first issue ... explanation regarding the source of the said 389 grams of jewellery, valued at Rs.9,58,885/–. Consequently, the AO treated the same as unexplained investment. 59. Before the ld.CIT(A), the assessee contended that he hails from an affluent family, and considering his family background, the explanation ought to have

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

The appeals of the assessee are disposed of as below:

ITA 2910/CHNY/2024[2016-2017]Status: DisposedITAT Chennai26 Aug 2025AY 2016-2017

Bench: Shri Aby T Varkey & Shri S. R. Raghunatha

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2853/CHNY/2024[2015-2016]Status: DisposedITAT Chennai26 Aug 2025AY 2015-2016

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

2853/Chny/2024, 2911 to 2913/Chny/2024 assessment was completed by the AO vide order dated 30.09.2021 making the following additions: i. Unexplained investment in jewellery to the extent of Rs.9,58,885/-; and ii. Unexplained investment in immovable property of Rs.73,25,679/- 57. The facts relevant to the first issue ... explanation regarding the source of the said 389 grams of jewellery, valued at Rs.9,58,885/–. Consequently, the AO treated the same as unexplained investment. 59. Before the ld.CIT(A), the assessee contended that he hails from an affluent family, and considering his family background, the explanation ought to have

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2851/CHNY/2024[2013-2014]Status: DisposedITAT Chennai26 Aug 2025AY 2013-2014

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

2853/Chny/2024, 2911 to 2913/Chny/2024 assessment was completed by the AO vide order dated 30.09.2021 making the following additions: i. Unexplained investment in jewellery to the extent of Rs.9,58,885/-; and ii. Unexplained investment in immovable property of Rs.73,25,679/- 57. The facts relevant to the first issue ... explanation regarding the source of the said 389 grams of jewellery, valued at Rs.9,58,885/–. Consequently, the AO treated the same as unexplained investment. 59. Before the ld.CIT(A), the assessee contended that he hails from an affluent family, and considering his family background, the explanation ought to have

Sundaram Sankar Anand, Karur vs. Assistant Commissioner, Coimbatore

In the result the appeals of the assessee are disposed of as below:

ITA 2850/CHNY/2024[2012-2013]Status: DisposedITAT Chennai26 Aug 2025AY 2012-2013

For Appellant: Shri. V. Alagappa, C.AFor Respondent: Mr. M.Murali, CIT (Virtual)

Section 132Section 143(2)Section 143(3)Section 153ASection 68

2853/Chny/2024, 2911 to 2913/Chny/2024 assessment was completed by the AO vide order dated 30.09.2021 making the following additions: i. Unexplained investment in jewellery to the extent of Rs.9,58,885/-; and ii. Unexplained investment in immovable property of Rs.73,25,679/- 57. The facts relevant to the first issue ... explanation regarding the source of the said 389 grams of jewellery, valued at Rs.9,58,885/–. Consequently, the AO treated the same as unexplained investment. 59. Before the ld.CIT(A), the assessee contended that he hails from an affluent family, and considering his family background, the explanation ought to have

Savaligayya Basayya Gaddagimath, Dharwad vs. ITO, Ward 1(1), Hubli

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

ITA 1011/BANG/2025[2017-18]Status: DisposedITAT Bangalore26 Aug 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2017-18

For Appellant: Shri Deepak Gunashekhar, ARFor Respondent: Shri Ganesh R Ghale, Standing Counsel for Department

Section 133(6)Section 148Section 56(2)(vii)

lakhs in the impugned property. Hence, the AO treated the amount of difference for Rs. 39.3 lakh (Rs. 69.3 – 30) and amount of unexplained investment of Rs. 9 lakh as income chargeable under the head other sources. As the property was being jointly purchased by the assessee and his brother

Ritesh Aggarwal, Mumbai vs. ITO - 16(3)(3), Mumbai

In the result the appeal of the assessee is partly allowed for In the result the appeal of the assessee is partly allowed for In the result the appeal of the assessee is partly allowed for statisti...

ITA 200/MUM/2024[2016-17]Status: DisposedITAT Mumbai26 Aug 2025AY 2016-17

Bench: Shri Sandeep Gosain () & Shri Om Prakash Kant () Assessment Year: 2016-17 Mr. Ritesh Aggarwal, Ito-16(3)(3), D 704, Imperial Heights Best Colony Aayakar Bhavan, Maharshi Road, Goregaon West, Opp. Vs. Karve Road, New Marine Lines, Goregaon Fire Bridge, Mumbai-400020. Mumbai-400104. Pan No. Aadpa 6828 R Appellant Respondent

For Respondent: Mr. Nishit Gandhi

Section 143(3)Section 147

doing so, the Assessing . In doing so, the Assessing Officer made the following additions: Officer made the following additions: (i) Unexplained investment in purchase of flat – ₹8,88,776/- (i) Unexplained investment in purchase of flat (i) Unexplained investment in purchase of flat (ii) (ii) Unexplained Unexplained receipt of gift ... said amount should not be called upon to show cause as to why the said amount should not be treated as unexplained investment within the treated as unexplained investment within the meaning of Section meaning of Section 69B of the Income-tax Act, 1961. tax Act, 1961. Mr. Ritesh Aggarwal

Geeta Vashistha, Talwandi Bhai vs. Income Tax Officer Ward -3 (1), Ferozepur

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

ITA 38/ASR/2024[2018-19]Status: DisposedITAT Amritsar25 Aug 2025AY 2018-19

Bench: Shri Udayan Das Gupta & Shri Brajesh Kumar Singh[Assessment Year: 2018-19]

Section 147Section 148Section 69ASection 69B

City Developers Pvt Ltd, therefore, an addition of Rs. 7,50,000/- was proposed to be added to the income of the assessee as unexplained investment u/s 69B of the Act. In reply, the assessee submitted that the assessee and her spouse i.e. Dr. UR Vashishtha were having sufficient cash

Shri Kartar Singh, Hoshiarpur vs. Income Tax Officer, Dasuya

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

ITA 294/ASR/2023[2011-12]Status: DisposedITAT Amritsar25 Aug 2025AY 2011-12

Bench: Shri Udayan Das Gupta & Shri Brajesh Kumar Singh[Assessment Year: 2011-12] Kartar Singh, Income Tax Officer, Vill. Hambaran, P.O. Bancha, Dasuya, Teh Dasuya, Hoshiarpur, Vs Punjab-144205 Punjab-144205 Pan-Bqfps7009R Appellant Respondent

Section 143(3)Section 147

making an addition to the extent of Rs.11,89,000/-, on account of cash deposit in bank accounts, by treating the same as unexplained investment, without considering the facts of the case and without considering the facts of the case and without observing the principles of natural justice. 7. During

Avinandita Mohanty, Bhubaneswar vs. Deputy Commissioner of Income Tax, Central Circle-2, Bhuabenswar

In the result, the appeal filed by the assessee is dismissed

ITA 366/CTK/2025[2012-13]Status: DisposedITAT Cuttack25 Aug 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Rajesh Kumari.T.A. No. 366/Ctk/2025 Assessment Year: 2012-2013 Avinandita Mohanty,………………...….………Appellant Plot No. 130, M/S. S.M. Consultants, Sm Tower, Mancheswar Industrial Area, Bhubaneswawr-751010, Odisha [Pan:Bazpm0561N] -Vs.- Deputy Commissioner Of Income Tax,..…….Respondent Central Circle-2, Bhubaneswar, Aayakar Bhawan Anne, Bhubaneswar-751007, Odisha Appearances By: N O N E, Appeared On Behalf Of The Assessee Shri Sanjay Kumar, Cit (D.R.), Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: August 20, 2025 Date Of Pronouncing The Order: August 25, 2025 O R D E R

Section 132Section 139Section 153ASection 246A

passed by making addition of Rs.3,21,210/ as unexplained income and Rs.19,35,000/- as unexplained investment. Against the assessment order, the appellant preferred an appeal under section 246A of the Income Tax Act. Ld. Commissioner of Income Tax (Appeals), Bhubaneswar-2 has dismissed the appeal. On being aggrieved ... Rs.19,35,000/- instead of correct figure of Rs.18,00,000/- as cash deposit, which was treated by the ld. CIT(Appeals) as unexplained investment. But in the appellate proceedings, against the order of ld. Assessing Officer, the ld. Counsel challenged for confirming the addition of Rs.12,50,385/- shown

Ashu Rani, Yamuna Nagar vs. Commissioner Appeal, New Delhi

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

ITA 683/CHANDI/2025[2019-2020]Status: DisposedITAT Chandigarh25 Aug 2025AY 2019-2020

Bench: The Ld. Cit(A) Who Has Confirmed The Addition, Holding That The Assessee Had Not Satisfactorily Explained The Source Of The On-Money Investment.

For Appellant: Shri Manoj Lamba, C.AFor Respondent: Smt. Surinder Kaur Waraich, Addl. CIT, Sr. DR (Virtual)

Section 131Section 147Section 250Section 69

Rs.22,00,000/- against the registered deed value of Rs.3,40,000/-. On this basis, an addition of Rs.18,60,000/- was made as unexplained investment u/s 69 of the Act. 3. Against the order of the AO the assessee went in appeal before ... that the assessee has recorded in her balance sheet the sum of Rs.9,05,260/- representing registered purchase value and supported construction expenses. No unexplained investment has been made. 5.2 The Ld. AR for the Assessee through written submissions placed before undersigned, further emphasized that even though the addition

Jagdishkumar Amrutlal Thakar, Patan vs. Income Tax Officer- Ward -3, Patan

In the result, the appeal of the assessee is allowed

ITA 984/AHD/2025[2010-11]Status: DisposedITAT Ahmedabad25 Aug 2025AY 2010-11

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Rajenkumar M Vasavda, Sr. DRFor Respondent: Shri Rajenkumar M Vasavda, Sr. DR

Section 144Section 147Section 148Section 250Section 271(1)(c)Section 69

framed u/s 144 r.w.s. 147 on account of cash deposits in the assessee’s bank account, which as per the Assessing Officer were unexplained investments, primarily due to non- compliance by the assessee during assessment proceedings. Before us, the assessee has filed written submissions and placed on record additional evidences

Jayshree Rao, Vadodara vs. The ITO, Ward-1(2)(1), Vadodara

In the result, appeal of the assessee is allowed

ITA 1262/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad25 Aug 2025AY 2018-19

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyaljayshree Rao, Vs. 401, Ivory, Nr. Pantaloon, The Income Tax Officer, Lawgarden, Mithakhali, Ward 1(2)(1), Navrangpura, Vadodara Ahmedabad-380009 [Pan :Arlpr 8185 R] (Appellant) .. (Respondent) Appellant By : Shri Jaimin Shah, Ar Respondent By: Shri Pratik Sharma, Sr Dr Date Of Hearing 07.08.2025 Date Of Pronouncement 25.08.2025 O R D E R Per Dr. B.R.R. Kumar, Vice-:-

For Appellant: Shri Jaimin Shah, ARFor Respondent: Shri Pratik Sharma, Sr DR

Section 147Section 148Section 250Section 69

property. Despite this explanation, the Assessing Officer completed the assessment under Section 147 r.w.s. 144 of the Act and added Rs.5,89,400/- as unexplained investment u/s 69 of the Act. 4. Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A), who partly allowed

Dhara Rakesh Sheth, Ahmedabad vs. Income Tax Officer, Ward 7(1)(1), Ahmedabad

In the result, appeal of the assessee is allowed

ITA 1186/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad25 Aug 2025AY 2016-17

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyaldhara Rakesh Sheth, The Income Tax Officer, Vs. 9, Ashwini Apartment, Ward-7(1)(1), Tejendra Park, Ahmedabad. Naranpura, Ahmedabad-380013. [Pan : Bglps5238 L] (Appellant) .. (Respondent) Appellant By : None Respondent By: Shri Prateek Sharma, Sr. Dr Date Of Hearing 05.08.2025 Date Of Pronouncement 25.08.2025 O R D E R Per Dr. B.R.R. Kumar, Vice-:-

For Appellant: NoneFor Respondent: Shri Prateek Sharma, Sr. DR

Section 142(1)Section 143(2)Section 144Section 69

furnish any details of source of Rs. 10,14,575/- till date. You are show caused why Rs. 10,14,575/- treated as your unexplained investment u/s.69 of the I.T. Act. 1961. You4 reply should be reach to this office on or before ... Asst. Year 2016-17 - 3– explained the source of Rs.10,14,575/- till date. However, assessee failed to furnish the required details of her unexplained investment of an amount of Rs. 10,14,575/-, Therefore an amount of Rs. 10,14,575/- has been added to the total income

Jagdish Amrutlal Thakar, Patan, Gujarat vs. Income Tax Officer- Ward -3, Patan

In the result, the appeal of the assessee is allowed

ITA 1046/AHD/2025[2010-11]Status: DisposedITAT Ahmedabad25 Aug 2025AY 2010-11

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Rajenkumar M Vasavda, Sr. DRFor Respondent: Shri Rajenkumar M Vasavda, Sr. DR

Section 144Section 147Section 148Section 250Section 271(1)(c)Section 69

Income Tax Officer, Kolkata vs. Shivrashi Vanijya Private Limited, Kolkata

In the result, the appeal is hereby treated as allowed

ITA 1098/KOL/2025[2013-14]Status: DisposedITAT Kolkata25 Aug 2025AY 2013-14

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(3)Section 148Section 148(2)Section 253Section 68

circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.8,48,70,200/- on account of unexplained investment. 2. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in deciding the case in favour

Mr. Dilip Marutirao Kalyankar, Mumbai vs. Income Tax Officer International Taxation Ward 3(1)(1), Mumbai

In the result, the appeal is allowed as indicated above

ITA 983/MUM/2025[2016-17]Status: DisposedITAT Mumbai25 Aug 2025AY 2016-17

Bench: Shri Saktijit Dey, Vp & Shri Girish Agrawal, Am Dilip Marutirao Kalyankar Ito, International Taxation – C/O. Umesh Kalyankar, 2F-1501, 3(1)(1) Room No. 608, 6Th Floor, Sapphire Lakeside Chs, Vs. Off Jvlr, Next To Union Of India Kautilya Bhavan, C-41 To C-43, Bldg., Powai, Mumbai-400 072 G Block, Bandra Kurla Complex, Bandra (E), Mumbai-400 051 Pan/Gir No. Ahopk 3818 M (Appellant) : (Respondent)

For Appellant: Shri Madhur Agrawal &For Respondent: Shri Krishna Kumar (Sr. DR)

Section 139(1)Section 147Section 148Section 69

property from MHADA as well as the amount of Rs.1,56,16,214/- paid to Neptune Developers towards purchase of another property as unexplained investment u/s. 69 of the Act and added back to the income of the assessee while framing the draft assessment order. 4. Contesting the aforesaid additions