“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

Pradeep Kumar Agrawal, Raipur vs. ACIT, Central Circle-1, Raipur

ITA 390/RPR/2025[2019-20]Status: DisposedITAT Raipur06 Aug 2025AY 2019-20

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 390/Rpr/2025 (िनधा"रण वष" Assessment Year: 2019-20)

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 115BSection 133ASection 143(3)Section 250Section 69

u/s115BBE on the count of excess stock of Rs.91,15,636 found during survey u/s133A on 19-2-19 treating it as unexplained investment u/s69; excess stock of Rs.91,15,636 on the count of gold & silver items i.e, 'business stock' has been recorded in the books of account & shown ... u/s115BBE on the count of investment in 'Girvi' of Rs.56,87,000 found during survey u/s133A on 19-2- 19 treating it as unexplained investment u/s 69; investment in 'Girvi' of Rs.56,87,000 found during the course of regular business which has been recorded in the books of account

Gaurav Agrawal Legal Heir of Santosh Kumar Agrawal, Raipur vs. ACIT, Central Circle-1, Raipur

ITA 389/RPR/2025[2019-20]Status: DisposedITAT Raipur06 Aug 2025AY 2019-20

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 389/Rpr/2025 (िनधा"रण वष" Assessment Year: 2019-20)

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 115BSection 133ASection 143(3)Section 250Section 3Section 69

w/s115BBE on the count of excess stock of Rs.2,06,47,091/- found during survey u/s 133A on 19-2-19 treating it as unexplained investment u/s69; excess stock of Rs. 2,06,47,091 on count of gold & silver items i.e. ‘business income’ which is included in 'net profit

Kalpeshbhai Busa, Jamnagar vs. Income Tax Officer, Ward 2(10), Jamnagar

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

ITA 104/RJT/2025[2014-15]Status: DisposedITAT Rajkot06 Aug 2025AY 2014-15

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकरअपीलसं./Ita No.104/Rjt/2025 ("नधा"रणवष" / Assessment Year: (2014-15) (Hybrid Hearing) Kalpeshbhai Busa Vs. Income Tax Officer, Wd – 2(10), Nr. Primary School, Village – Bavaria, Jamnagar – 361001 Gujarat – 361012 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Cjdp5832K (Appellant) (Respondent) Appellant By : Shri Chetan Agarwal, Ld. Ar Respondent By : Shrisanjay Punglia, Ld. Cit(Dr) Date Of Hearing : 10/06/2025 Date Of Pronouncement : 06/08/2025 आदेश / O R D E R Per Dinesh Mohan Sinha, Jm:

For Appellant: Shri Chetan Agarwal, Ld. ARFor Respondent: ShriSanjay Punglia, Ld. CIT(DR)

Section 142(1)Section 144Section 147Section 148Section 250Section 69A

erred in law as well as on fact in upholding an addition of Rs. 3,41,26,500/- made by Ld. AO as unexplained investment u/s 69A of the Act. KALPESHBHAI BUSA v. ITO 3. Brief facts of the case that the assessee had not filed the return of income

Ranjeet Kumar (Individual), Begusarai vs. Income Tax Officer, Ward- 2 (1), Begusarai

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

ITA 198/PAT/2025[2015-16]Status: DisposedITAT Patna06 Aug 2025AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 115BSection 144BSection 147Section 148Section 250Section 271(1)(b)Section 271(1)(c)Section 271FSection 282Section 69

that the Ld. CIT(A) has erred in upholding the addition of Rs.1,57,98,000/- u/s 69 r.w.s. 115BBE of the Act being Unexplained investments in immovable property. 9. For that the Ld. CIT(A) has erred in upholding the order passed by the Ld. A.O as the initiation

Raghav Kumar Dhoot, Jaipur vs. DCIT Central Circle 1, Jaipur

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

ITA 491/JPR/2025[2018-19]Status: DisposedITAT Jaipur06 Aug 2025AY 2018-19

For Appellant: Shri C.M. Agarwal, C.AFor Respondent: Shri Rajesh Ojha, CIT- DR

Section 143(2)Section 143(3)Section 153ASection 292BSection 68

said cash loans are not referable to either any entries in the Books of accounts or to any unaccounted expenditure or to any unexplained investment made by the appellant. 3.3 On the facts and circumstances of the case, the Ld CIT(A) erred in law in upholding the addition ... said cash loans are not referable to either any entries in the Books of accounts or to any unaccounted expenditure or to any unexplained investment made by the appellant. 3.3 On the facts and circumstances of the case, the Ld CIT (A) erred in law in upholding the addition

Shivam Readymix Private Limited, Jaipur vs. ACIT, Jaipur

In the result, the appeal of the assessee is allowed

ITA 166/JPR/2025[2012-13]Status: DisposedITAT Jaipur06 Aug 2025AY 2012-13

For Appellant: Shri Tarun Mittal, CA &For Respondent: Mrs. Anita Rinesh, JCIT, Sr. DR

Section 143(2)Section 143(3)Section 147Section 148Section 40A(3)Section 69C

Hence the resultant addition can only be to the extent of net profit earned and balance addition of the entire amount on account of unexplained investment deserves to be deleted. 3. On the facts and in the circumstances of the case and without prejudice to above ... Income Tax Act, 1961 on the allegation that the purchase of grit being out of books is unexplained investment ignoring the fact that these alleged purchases are spread over whole 12 months period and initial investment, if any, is out of unaccounted income offered in the group in the hands

Deputy Commissioner of Income -Tax, Central Circle-1(2), Ahmedabad vs. Goyal and Co. (Const.) Private Limited., Ahmedabad

ITA 1836/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad06 Aug 2025AY 2016-17

Bench: Shri Sanjay Garg & Shri Narendra Prasad Sinhaआयकर अपील सं /Ita No.1836/Ahd/2024 िनधा"रण वष" /Asst.Year 2016-17 The Dcit Goyal & Co. (Const.) Private बनाम/ Central Circle-1(2), Limited V/S. Ahmedabad – 380 009 10Th Floor Commerce House Iv Beside Reliance Petrol Pump 100Ft. Road, Satellite Ahmedabad – 380 015 अपीलाथ'/ (Appellant) !( यथ'/ (Respondent) .. & Cross Objection No.42/Ahd/2024 - िनधा"रण वष" /Ay 2016-17 (In Ita No.1836/Ahd/2024 – Ay 2016-17) V/S. Goyal & Co. (Const.) Private The Dcit Limited Central Circle-1(2), 10Th Floor,Commerce House Iv Ahmedabad – 380 009 Beside Reliance Petrol Pump 100Ft. Road, Satellite Ahmedabad – 380 015 Pan: Aabcg 5459 R (Cross Objector) .. (Respondent)

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Kavan Limbasiya, Sr.DR

Section 132Section 143(1)Section 143(3)Section 148Section 69

made by the assessee. The Assessing Officer, accordingly, completed the assessment under section 143(3) r.w.s. 147, wherein, he treated the cash component as unexplained investment under section 69 and added ₹5.30 crore to the returned income. 7. Aggrieved by the assessment order, the assessee preferred appeal before ... observed that the AO had successfully discharged the initial burden of proof by bringing credible and corroborated material to establish a case of unexplained investment by the assessee. He observed that the onus then shifted to the assessee to rebut the evidence, which the assessee failed to do with

ACIT., Central Circle-2(2), Hyderabad vs. Sri Aditya Homes Private Limited, Hyderabad

In the result the appeal I

ITA 98/HYD/2025[2013-14]Status: DisposedITAT Hyderabad06 Aug 2025AY 2013-14

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri AV Raghuram, AdvocateFor Respondent: Dr. Sachin Kumar, Sr. AR

case and in law, the ld. CIT(A) had not erred in sustaining the addition, in principle, of Rs.5,00,00,000/- as unexplained investment. 5. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) had not erred in sustaining ... ground no.5 of assessee’s appeal and ground no.4 of cross objection filed by the Revenue is addition of Rs.5,00,00,000/- as unexplained investment based on the document found during the course of search by applying two zeros to the figures. 52. During the course of search proceedings

Kasireddy Sasikalamma, Nellore vs. ITO., Ward -1, Gudur

ITA 225/HYD/2025[2017-18]Status: DisposedITAT Hyderabad06 Aug 2025AY 2017-18

Bench: Us:

For Appellant: NoneFor Respondent: Shri Helen Ruby Jesindha

Section 147Section 148Section 68Section 69ASection 69BSection 69C

monies, jewellery or valuables have been properly recorded in the books of account. (vi) The Entire addition is void and ought to be quashed. Unexplained Investment u/s 69B-Land Purchased-Rs.13,90,000/- (vii) The Learned AO/CIT(A) has travelled beyond the scope of the re- opening while making

Siddhartha Agencies, Secunderabad vs. Income Tax Officer, Ward-10(1), Hyderabad

ITA 123/HYD/2025[2017-2018]Status: DisposedITAT Hyderabad06 Aug 2025AY 2017-2018

Bench: Us:

For Appellant: Shri K.C. Devdas, C.AFor Respondent: Dr. Sachin Kumar, Sr.A.R

Section 144Section 147Section 250

claim of the Ld. AR, that though the A.O. had, based on information, made an addition under Section 69A of the Act, regarding unexplained investment in fixed/time deposit of Rs. 54 lacs but the same actually amounted to Rs. 48 lacs. It is further the claim of the assessee that ... made in the hands of the assessee firm, viz. (i). unexplained money utilized for making payments for imports: Rs. 3,78,14,023/-; (ii). unexplained investments in fixed/time deposits with bank: Rs. 54,00,000/- and (iii). unexplained cash deposits in the bank account

Krishnendu Bikash Jana, Purba Medinipur vs. ITO, Ward 27(1), Haldia

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

ITA 1105/KOL/2025[2013-2014]Status: DisposedITAT Kolkata06 Aug 2025AY 2013-2014

Bench: Sonjoy Sarma & Sri Rakesh Mishra

Section 147Section 148Section 250Section 69

mandatory. 4. For that on the facts and in circumstances of the case, the addition of Rs. 81,80,000/- has made on account unexplained investment in immovable property without asking for the Report of the DVO which is arbitrary & unjust for. 5. For that your petitioner craves leave ... property for the calculation of the income of the assessee. However, as the addition was made u/s 69 of the Act on account of unexplained investment in the property and did not emanate from the assessment order of the Ld. AO, therefore, this ground of appeal was dismissed

Deputy Commissioner of Income Tax, Central Circle-2, Trichy vs. No 1 Auto Finance, Karur

In the result, the appeals of the Revenue in ITA Nos

ITA 658/CHNY/2025[2018-19]Status: DisposedITAT Chennai06 Aug 2025AY 2018-19

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita Nos.:656 To 658/Chny/2025 धनिाजरण वर्ज / Assessment Years: 2012-13, 2015-16 & 2018-19 Deputy Commissioner Of Income Tax, No.1 Auto Finance, Central Circle – 2, Vs. No.1, Tam Complex, Nrmp Street, Trichy Covai Road, Karur – 639 002. [Pan:Aahfn 3793 J] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) आयकर अपील सं./Ita Nos.:622 & 633/Chny/2025 धनिाजरण वर्ज / Assessment Years: 2012-13 & 2018-19 Deputy Commissioner Of Income Tax, Help Line Motor Finance, Central Circle – 2, Vs. No.1, Tam Complex, Nrmp Street, Trichy Covai Road, Karur – 639 002. [Pan:Aaffh 3971 E] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Ms.E.Pavuna Sundari, Cit प्रत्यथी की ओर से/Respondent By : Shri.R.Venkata Raman, Ca & Shri.R.S.Lakshmi Narayana, Advocate सुनवाई की तारीख/Date Of Hearing : 18.06.2025 घोर्णा की तारीख/Date Of Pronouncement : 06.08.2025

For Appellant: Ms.E.Pavuna Sundari, CITFor Respondent: Shri.R.Venkata Raman, CA &

Section 132Section 143(3)

there were certain entries found from the records of third party is not sufficient to make addition on the ground that assessee had made unexplained investments. 17.17 The Ld.CIT(A) has rightly relied upon the decision of the coordinate bench of Tribunal in the case of DCIT v. Appu Direct

Deputy Commissioner of Income Tax, Central Circle-2, Trichy vs. No 1 Auto Finance, Karur

ITA 657/CHNY/2025[2015-16]Status: DisposedITAT Chennai06 Aug 2025AY 2015-16

For Appellant: Ms.E.Pavuna Sundari, CITFor Respondent: Shri.R.Venkata Raman, CA &

Section 132Section 143(3)

Deputy Commissioner of Income Tax, Central Circle-2, Trichy vs. No 1 Auto Finance, Karur

In the result, the appeals of the Revenue in ITA Nos

ITA 656/CHNY/2025[2012-13]Status: DisposedITAT Chennai06 Aug 2025AY 2012-13

For Appellant: Ms.E.Pavuna Sundari, CITFor Respondent: Shri.R.Venkata Raman, CA &

Section 132Section 143(3)

Deputy Commissioner of Income Tax, Central Circle-2, Trichy vs. Help Line Motor Finance, Karur

In the result, the appeals of the Revenue in ITA Nos

ITA 633/CHNY/2025[2018-19]Status: DisposedITAT Chennai06 Aug 2025AY 2018-19

For Appellant: Ms.E.Pavuna Sundari, CITFor Respondent: Shri.R.Venkata Raman, CA &

Section 132Section 143(3)

Deputy Commissioner of Income Tax, Central Circle-2, Trichy vs. Help Line Motor Finance, Karur

In the result, the appeals of the Revenue in ITA Nos

ITA 622/CHNY/2025[2012-13]Status: DisposedITAT Chennai06 Aug 2025AY 2012-13

For Appellant: Ms.E.Pavuna Sundari, CITFor Respondent: Shri.R.Venkata Raman, CA &

Section 132Section 143(3)

ACIT Central Circle16, New Delhi vs. Krishna Dal Mill Pvt Ltd, New Delhi

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

ITA 1737/DEL/2020[2014-15]Status: DisposedITAT Delhi06 Aug 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri M. Balaganeshacit, Vs. M/S. Krishna Dal Mill Pvt. Ltd, Central Circle-16, C-19, Lawarance Road, New Delhi Pitampura, North West Delhi, Delhi-110035 (Appellant) (Respondent) Pan: Aaack0099E Assessee By : Shri Satyen Sethi, Adv Shri A. T. Panda, Ms. Gargi Sethi, Adv Shri Nirbhay Mehta, Adv Shri Aswani Gupta, Ca Revenue By: Ms. Namita Khurana, Cit-Dr (On Rotational Duty) Date Of Hearing 02/07/2025 Date Of Pronouncement 06/08/2025

For Appellant: Shri Satyen Sethi, AdvFor Respondent: Ms. Namita Khurana, CIT-Dr (on rotational duty)

Section 132Section 143(1)Section 143(3)Section 153Section 245C(1)Section 245D(1)Section 245D(4)

additional income offered to explain the shortage in stock of gold M/s. Krishna Dal Mill Pvt. Ltd and diamonds does not match with the unexplained investment in share capital. Thereafter, the assessments of the assessee were carried out under Section 153 A or under Section ... Sunrise Infratec Private Ltd at Rs 33,86,46,800/- was sought to be added to the total income of the assessee as unexplained investment. The Learned CITA observed that as on 31-03-2014, Sunrise Infratec Pvt. 12. Ltd. owned 6 acres of land. In the books

Prakash Kumar Kshatriya, Rajnandgaon vs. Income Tax Officer, Ward-1, Rajnandgaon, Rajnandgoan

In the result, appeal of the assessee is allowed

ITA 436/RPR/2025[2016-17]Status: HeardITAT Raipur05 Aug 2025AY 2016-17

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.436/Rpr/2025 "नधा"रण वष" /Assessment Year : 2016-17 Prakash Kumar Kshatriya House No.9, Ward No.44, Kaurin Bhata, Shiv Colony, Rajnandgaon-491 441 (C.G.) Pan: Cdhpk3190B .......अपीलाथ" / Appellant बनाम / V/S. The Income Tax Officer, Ward-1, Rajnandgaon (C.G.) ……""यथ" / Respondent

For Appellant: None (Adjournment Application)For Respondent: Dr. Priyanka Patel, Sr. DR

Section 69A

assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash ... follows: “5. At the outset, on this issue, it is noted that the AO had made addition u/s.69 of the Act which refers to unexplained investment. However, in this case, the assessee had neither purchased nor sold any moveable or immoveable property, nor had invested in any such property

Pareshpari Pravinpari Gosai, Morbi vs. ITO WD-1 Morvi, Morvi

In the result, appeal of assessee is allowed

ITA 258/RJT/2025[2017-18]Status: DisposedITAT Rajkot05 Aug 2025AY 2017-18

Bench: Dr. Arjun Lal Sainiआयकर अपील सं./ Ita No.258/Rjt/2025 "नधा"रण वष"/Assessment Year : 2017-18

For Appellant: Shri Chetan Agarwal, ARFor Respondent: Shri Dheeraj Kumr Gupta, Sr-DR

Section 142(1)Section 144Section 147Section 148Section 148ASection 149(1)Section 149(1)(b)Section 250Section 251(1)(a)Section 69

Officer had passed Assessment Order u/s.147 r.w.s. 144 r.w.s.144B of the Income Tax Act making addition of Rs. 26,04,000/-, on account of unexplained investment u/s 69 of the I.T. Act for the A.Y. 2017-18. Pareshpari P Gosai, 5. Aggrieved by the order of Assessing Officer, the assessee

Dhanji Murji Hirani, Kutch vs. ITO.(Int.Txn)Gandhidham, Gandhidham

In the result, the appeal of the assessee is allowed

ITA 131/RJT/2025[2019-20]Status: DisposedITAT Rajkot05 Aug 2025AY 2019-20

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं /.Ita No.131/Rjt/2025 िनधा"रणवष"/ Assessment Year: 2019-20 Dhanji Murji Hirani, Baladia Ito (Int.Txn), बनाम Bhuj, Kutch, Gandhidham Gujarat 370427 Vs. Pan : Afaph0463B (अपीलाथ"/Appellant) : (""यथ"/Respondent) िनधा"रती क" ओर से/Assessee By : Shri Kalpesh Doshi, Ld.Ar राज"व क" ओर से/Revenue By : Shri Sanjay Punglia, Cit-Dr

For Appellant: Shri Kalpesh Doshi, ld.ARFor Respondent: Shri Sanjay Punglia, CIT-DR

Section 115BSection 127Section 139Section 147Section 148Section 148ASection 234ASection 271ASection 69

jurisdiction. 4. That, the Ld. CIT(Ld. DRP-2) Mumbai-2 has wrongly confirmed the addition of Rs.1,00,60,306/-,on account of unexplained investment u/s 69 1.T. Act, 1961. 5. That, the Ld. assessing officer has wrongly applied provisions of section 115BBE