“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

Thapar Homes Ltd., New Delhi vs. ACIT, New Delhi

In the result, impugned order is set aside and appeal of the assessee is

ITA 41/DEL/2017[2009-10]Status: DisposedITAT Delhi19 Aug 2025AY 2009-10

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं. 570, 571 & 41 /दिल्ली/2017 (नि.व. 2006-07, 2007-08 & 2009-10)

For Appellant: S/Shri Vikas Jain, Hardik Jayal, Nilesh Singh &For Respondent: Shri Mahesh Kumar, CIT(DR)

Section 153ASection 68Section 69C

facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs.5,38,125/-made by AO on account of unexplained investment. 8. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs.1,29,056/-made ... decision in the case of PCIT vs. Abhisar Buildwell P. Ltd. (supra). 10. 3. In respect of ground of appeal no. 7 relating to unexplained investment u/s. 69A of the Act based on Annexure A-8 page no 72 Party O-1, the Id. counsel for assessee submitted that

ACIT, New Delhi vs. M/S. Thapar Homes Ltd., New Delhi

ITA 1142/DEL/2017[2006-07]Status: DisposedITAT Delhi19 Aug 2025AY 2006-07

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं. 570, 571 & 41 /िद"ी/2017 (िन.व. 2006-07, 2007-08 & 2009-10)

For Appellant: S/Shri Vikas Jain, Hardik Jayal, Nilesh Singh &For Respondent: Shri Mahesh Kumar, CIT(DR)

Section 153ASection 68Section 69C

circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 5,38,125/-made by AO on account of unexplained investment. 8. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 1,29,056/-made ... decision in the case of PCIT vs. Abhisar Buildwell P. Ltd. (supra). 10.3. In respect of ground of appeal no. 7 relating to unexplained investment u/s. 69A of the Act based on Annexure A-8 page no 72 Party O-1, the ld. counsel for assessee submitted that the said

ACIT, New Delhi vs. M/S. Thapar Homes Ltd., New Delhi

In the result, impugned order is set aside and appeal of the assessee is

ITA 1141/DEL/2017[2007-08]Status: DisposedITAT Delhi19 Aug 2025AY 2007-08

Bench: Shri Vikas Awasthy & Shri M. Balaganeshआअसं. 570, 571 & 41 /दिल्ली/2017 (नि.व. 2006-07, 2007-08 & 2009-10)

For Appellant: S/Shri Vikas Jain, Hardik Jayal, Nilesh Singh &For Respondent: Shri Mahesh Kumar, CIT(DR)

Section 153ASection 68Section 69C

Anshuman Sharma, Bikaner vs. ITO, Ward-1(4), Bikaner

In the result, appeal of the Assessee is partly allowed

ITA 583/JODH/2024[2015-16]Status: DisposedITAT Jodhpur18 Aug 2025AY 2015-16

Bench: SHRI. LALIET KUMAR (Judicial Member), DR. MITHA LAL MEENA (Accountant Member)

For Appellant: Shri Shafi Mohd. Chouhan, AdvocateFor Respondent: Smt. Anuradha, Addl. CIT DR

Section 69Section 69A

make an addition of Rs.3,00,000/- towards alleged stock purchases and Rs.1,00,000/- towards unexplained cash investment, treating the same as unexplained investments under section 69 of the Income Tax Act, 1961. 4. Aggrieved by the order so passed, the assessee carried the matter in appeal before

Shri Khurshid Ahmad Bazaz, Srinagar vs. Income Tax Officer Ward-1, Srinagar

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

ITA 526/ASR/2024[2012-13]Status: DisposedITAT Amritsar18 Aug 2025AY 2012-13

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta(Hybrid Hearing) I.T.A. No. 526/Asr/2024 Assessment Year: 2012-13

Section 133(6)Section 142(1)Section 144Section 147Section 148Section 250

rather on any tangible material. 4. The Ld. CIT(A) erred in both facts & laws, by conforming addition of Rs 33,76,500.00 as unexplained investment in an arbitrary manner, when the same represent sales made in an ordinary course of business duly accounted in the books of accounts

Shri. Mohd Shabir Mir, Srinagar vs. Income Tax Officer Ward-1, Srinagar

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

ITA 346/ASR/2023[2012-13]Status: DisposedITAT Amritsar18 Aug 2025AY 2012-13

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta(Hybrid Hearing) I.T.A. No. 346Asr/2023 Assessment Year: 2012-13

Section 133(6)Section 144Section 148Section 250

explanation has been filed by the assessee, regarding the source of cash deposited in bank account. As such the same has been treated as unexplained investment made by the assessee and the assessment was completed ex parte on a total income of Rs.29.39 lakhs. 4. The matter was carried

Mahasukhrai Pragjibhai Shah, Mumbai vs. Income Tax Officer- 19(2)(3), Mumbai

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

ITA 2637/MUM/2025[2012-13]Status: DisposedITAT Mumbai18 Aug 2025AY 2012-13

Bench: Shri Narender Kumar Choudhryassessment Year: 2012-13

For Appellant: Shri Malav Sheth, Ld. A.RFor Respondent: Shri Kavan Limbasiya, Ld. Sr. D.R

Section 139(1)Section 143Section 144Section 148Section 250Section 44A

Officer (AO) vide order dated 21.11.2019 u/s 144 r.w.s. 147 of the Act has made the addition of Rs.27,63,726/- on account of unexplained investment. 3. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner and mainly claimed that though the Assessee has filed various documents

Promilla Mathur, Delhi vs. AO, Civic Centre, New Delhi

Appeal is allowed for statistical purposes

ITA 3852/DEL/2025[2012-13]Status: DisposedITAT Delhi18 Aug 2025AY 2012-13

Bench: Shri Mahavir Singh, Hon’Bleasstt. Year : 2012-13 Promilla Mathur, Vs. Cit(A)/Nfac D-55, Gulmohar Park, Delhi New Delhi (Pan: Afkpm7548E) (Appellant) (Respondent) Appellant By : Shri Alok Mital, Ca Respondent By : Shri Sangeet Bansal, Sr. Dr. Date Of Hearing 06.08.2025 Date Of Pronouncement 06.08.2025 Order This Appeal Has Been Filed By The Assessee Against The Order Dated 15.04.2025 Passed By The Nfac, Delhi For The Assessment Year 2012-13 On The Following Ground:- 1. The Order Passed By The Ai/Cit(A) Is Bad In Law, Wrong On Facts & Against The Principles Of Natural Justice. 2. That In View Of The Facts & Circumstances Of The Case, The Ao/Cit(A) Has Erred, Both On Facts & In Law, In Assessing / Upholding The Income Of The Assessee At Rs. 14,25,293/- As Unexplained Despite Producing Documents On Record.

For Appellant: Shri Alok Mital, CAFor Respondent: Shri Sangeet Bansal, Sr. DR

Section 144Section 147Section 271(1)(c)Section 69Section 69ASection 69C

grossly erred in making/upholding addition of Rs. 12,00,000/- u/s. 69 of the Act by treating investment in mutual funds as unexplained investments. 4. The AO/CIT(A) has grossly erred in making / upholding addition of Rs. 2,21,174/- u/s. 69C of the Act, by treating payment against credit ... thereby making addition of transactions amounting to Rs. 14,25,293/- (Rs. 2,21,174/- + Rs. 12,00,000/- + Rs. 4119/-) being unexplained investment and undisclosed income of the assessee for the year under consideration. In appeal, Ld. CIT(A) dismissed the appeal of the assessee. Aggrieved, assessee filed

Pawan Mechu, Chirawa vs. DCIT Cen Cir 1, Jaipur

ITA 74/JPR/2025[2018-19]Status: DisposedITAT Jaipur14 Aug 2025AY 2018-19

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri Vedant Agarwal, AdvFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 132Section 132(1)Section 139Section 143(2)Section 153CSection 69

impugned orders passed by Learned CIT(A). 15. Section 69 of the Act needs to be reproduced for ready reference. It reads as under:- “Unexplained investments. 69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books ... investments may be deemed to be the income of the assessee of such financial year.” 16. As per above provision, the value of the unexplained investment, shall be deemed to be income of the assessee of the financial year “immediately preceding assessment year” during which the assessee made said unexplained

Pawan Mechu, Jhunjhunu vs. DCIT Cen Cir 1, Jaipur

ITA 1458/JPR/2024[2016-17]Status: DisposedITAT Jaipur14 Aug 2025AY 2016-17

Bench: CIT(A).

For Appellant: Shri Vedant Agarwal, AdvFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 132Section 132(1)Section 139Section 143(2)Section 153CSection 69

Ketan Priyavadan Shah, Ahmedabad vs. The ITO, Ward-1(2)(3), Ahmedabad

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

ITA 734/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad14 Aug 2025AY 2020-21

Bench: Ms. Suchitra R. Kamble & Makarand V.Mahadeokarasstt.Year : 2020-2021 Ketan Priyavadan Shah The Ito, Ward-1(2)(3) 6, Vidyanagar Co-Op Hsg. Society Vs. Vejalpur Ashram Road, Usmanpura Ahmedabad. Ahmedabad. Pan : Afgps 3703 K (Applicant) (Responent) : Shri Parin Shah, Ar Assessee By : Shri Atul Pandey, Sr.Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 12/08/2025 घोषणा क" तारीख /Date Of Pronouncement: 14/08/2025

For Appellant: Shri Atul Pandey, Sr.DR

Section 143(3)Section 144BSection 234ASection 270ASection 271ASection 56(2)(x)Section 69

aside for adjudication on merits considering submission. 4. Ld. NFAC erred in law and on facts in confirming addition of Rs.13,35,000/- as unexplained investment by invoking section 69 of the Act. 5. Ld. NFAC erred in law and on facts in confirming addition of Rs.4 ... unexplained investment by invoking section 69 of the Act. 6. Ld. NFAC erred in law and on facts in confirming addition of Rs.89,93,282/- made by invoking section 56(2)(x) (b) of the Act. 7. Initiation of penalty proceedings under section 271AAC of the Act is unjustified

Amitkumar Navnitbhai Patel, Ahmedabad vs. The ACIT, Circle-2(1)(1), Ahmedabad

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

ITA 984/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad14 Aug 2025AY 2017-18

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.984/Ahd/2023 िनधा"रण वष" /Assessment Year : 2017-18 Amitkumar Navnitbhai Patel The Acit बनाम/ A/1-1, Madhav Apartment Circle 2(1)(1) V/S. Opp. Municipal Garden Ahmedabad – 380 015 Vasna Ahmedabad – 390 007 "थायी लेखा सं./Pan: Amppp 5605 F अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri P.F. Jain, Ca Revenue By : Shri Atul Pandey, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 13/08/2025 घोषणा की तारीख /Date Of Pronouncement: 14/08/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri P.F. Jain, CAFor Respondent: Shri Atul Pandey, Sr.DR

Section 115BSection 143(3)Section 69Section 69A

appeal: 1. The learned CIT(A) has erred in law and facts in upholding addition of Rs.18,66,500/- made by the AO as unexplained investment. 2. The learned CIT(A) has erred in law and facts in upholding addition of Rs.86,94,000/- made by the AO as undisclosed

Kalkere Puttaraju Vajramunie, Royal Hermitage, Kalkere B.O, Kalkere vs. Deputy Commissioner of Income Tax Central Circle 1(4) Bangalore, Bangalore, Karnataka

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

ITA 902/BANG/2025[2018-19]Status: DisposedITAT Bangalore14 Aug 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Siddesh N Gaddi, CAFor Respondent: Shri Balusamy N, JCIT (DR)

Section 132Section 143(3)Section 153ASection 69B

details regarding the identity and credit worthiness of the lender. Hence, the AO treated the remaining amount of investment of ₹ 53,43,800/- as unexplained investment under section 69B of the Act and added to the total income of the assessee. Thereby, the AO completed the assessment under section ... present appeal revolves around the addition of ₹53,43,800/- made by the AO under section 69B of the Act, treating the same as unexplained investment in the purchase of an immovable property. 18.1 The admitted facts are that the assessee purchased a property during the relevant assessment year

Kalkere Puttaraju Vajramunie, Royal Hermitage, Kalkere B.O, Kalkere vs. Deputy Commissioner of Income Tax Central Circle 1(4) Bangalore, Bangalore, Karnataka

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

ITA 901/BANG/2025[2014-15]Status: DisposedITAT Bangalore14 Aug 2025AY 2014-15

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Siddesh N Gaddi, CAFor Respondent: Shri Balusamy N, JCIT (DR)

Section 132Section 143(3)Section 153ASection 69B

Arogyamary Chowrappa, Ramanagara vs. Income Tax Officer, Ward-592)(1), Bangalore

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

ITA 1070/BANG/2025[2017-18]Status: DisposedITAT Bangalore14 Aug 2025AY 2017-18

Bench: Shri Narender Kumar Chodhry & Shri Waseem Ahmedassessment Year: 2017-18

For Appellant: Shri S.V Ravishankar, AdvocateFor Respondent: Shri Ganesh R Ghale, Advocate, Standing

Section 69

through cash amounting to ₹23,44,245.00, the source of these amounts was not explained. Accordingly, the AO treated the same as unexplained investment under section 69 of the Act and added the sum of ₹25,94,245 to the total income of the assessee. 4. Aggrieved, the assessee preferred

Sharad Sevantilal Shah, Mumbai vs. Income Tax Officer Ward 23(3)(6), Mumbai

The appeal of the assessee is allowed

ITA 4154/MUM/2025[2016-17]Status: DisposedITAT Mumbai14 Aug 2025AY 2016-17

Bench: Justice (Retd.) C V Bhadang & Ms Padmavathy S, Am

For Appellant: Shri B. V. Jhaveri, ARFor Respondent: Shri Swapnil Choudhary, Sr. DR

Section 250Section 56(2)(vii)

hands of the assessee. The AO however did not accept the submissions of the assessee and proceeded to treat the difference amount as unexplained investment under section 69B of the Act. Aggrieved assessee filed further appeal before the CIT(A). The CIT(A) held that the difference between the sale ... consideration of Rs.3.15 crores. The stamp duty on the date of registration was Rs.4.12 crores and therefore the AO added the difference amount as unexplained investment under section 69B of the Act. The CIT(A) sustained the addition but held that the addition is to be made under section

Nupendra Vishwarup Joshi, Mumbai vs. Income Tax Officer Ward 41(3)(1), Mumbai

ITA 3960/MUM/2025[2018-19]Status: DisposedITAT Mumbai14 Aug 2025AY 2018-19

Bench: Shri Anikesh Banerjee, Jm & Shri Omkareshwar Chidara, Am

For Respondent: Shri Leyaqat Ali Aafaqui, Sr.-AR

Section 142(1)Section 144Section 148Section 56(2)(x)Section 69B

made an addition of Rs. 57,25,000/- u/s 69B and Rs. 2,80,840/- u/s 56(2)(x)(b) of the Act towards unexplained investment in immovable property and the differential amount

Hemlata Harakchand Shah, Ahmedabad vs. The ITO, Ward-6(1)(4), Ahmedabad

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

ITA 835/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad13 Aug 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent byFor Respondent: Date of Hearing

Section 139(1)Section 142(1)Section 144Section 148Section 249(4)Section 249(4)(b)

Officer proceeded to finalize an ex- parte assessment under Section 144 of the Act. The total amount of ₹13,32,916/- was treated as unexplained investment and added to the income of the assessee for the impugned year under consideration. 5. In appeal, CIT(Appeals) dismissed the appeal

Lakhubhai Nathubhai Sisodiya, Ahmedabad vs. ITO, Ward 3(2)(3), Ahmedabad, Current ITO Ward 3(1)(2)

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

ITA 716/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad13 Aug 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri P D Shah, ARFor Respondent: Shri Prateek Sharma, Sr. DR

Section 139Section 147Section 148Section 271(1)(c)Section 69

Year –2012-13 - 4– penalty under section 271(1)(c) was levied on the amount of Rs. 8,75,000/- which was treated as unexplained investment, and the penalty was computed in accordance with the provisions of the Act. 5. In appeal, CIT(Appeals) dismissed the appeal of the assessee

Dipa Prakashkumar Velani, Ahmedabad vs. The ITO, Ward-1(2), Bhavnagar

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

ITA 1039/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad13 Aug 2025AY 2015-16

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Manish J Shah & Shri Rushin Patel ARSFor Respondent: Shri Prateek Sharma, Sr. DR

Section 115BSection 147Section 148Section 148ASection 156Section 69

erred in law and on facts of the case, in confirming the addition of Rs.43,33,000/- u/s.69 of the Act being alleged unexplained investment without appreciating the facts and law of the case properly. 4. The ld. CIT(A) has erred in law and on facts of the case ... assessee failed to substantiate her claim. Therefore, CIT(Appeals) upheld the findings of the AO, confirming the addition of ₹42,33,000/- as unexplained investment under Section 69 of the Act and ₹2,08,780/- as short-term capital gains, disallowing the cost of improvement. Accordingly, the appeal was dismissed