← All Phrases

“unexplained expenditure”

Cash Credits & Unexplained ItemsSection 69CSection 69C3,276 judgments

The decision most relied on for unexplained expenditure is CIT v. Bholanath Poly Fab. Pvt. Ltd. (355 ITR 290), cited in 712 judgments on BharatTax.

Leading authorities on unexplained expenditure

CIT v. Bholanath Poly Fab. Pvt. Ltd.
355 ITR 290 · 2013 · High Court
712
citing judgments

If an assessee makes purchases from bogus parties, but the underlying goods are genuinely acquired and sold, only the profit margin embedded in such purchases, and not the entire value of the bogus purchases, should be added to the assessee's income.

Vijay Proteins Ltd. v. Asst. CIT
58 ITD 428 · 1996 · ITAT
430
citing judgments

Where purchases are found to be non-genuine or fictitious, a reasonable disallowance of 25% of such purchases or the peak credit, whichever is higher, can be made. This is applied to address unexplained expenditure under Section 69C when actual goods are likely procured from the grey market.

Nikunj Eximp Enterprises v. CIT
216 Taxmann 171 · 2013 · High Court
325
citing judgments

Purchases may be treated as genuine even if the purchase parties are untraceable or not available for verification, as long as there is no specific evidence from the parties themselves denying the transactions or proving them to be bogus.

CIT v. M.K. Brothers
163 ITR 249 · 1987 · High Court
262
citing judgments

Mere non-production of a party or their denial of a transaction is insufficient to treat a payment as non-genuine if it is duly recorded in books and made through banking channels. Once the assessee furnishes relevant documentation, the burden shifts to the Assessing Officer to prove the transaction is not genuine.

N.K. Proteins Ltd. v. DCIT
84 Taxmann.com 195 · 2017 · Supreme Court
204
citing judgments

When purchases are found to be entirely bogus and based on fictitious invoices from non-existent or unconfirmed suppliers, the entire amount of such purchases is liable to be added back as unexplained expenditure, not merely a percentage thereof.

CIT v. La Medica
250 ITR 575 · 2001 · High Court
150
citing judgments

When purchases are shown to be non-genuine, the entire amount is to be disallowed as unexplained expenditure under section 69C, irrespective of whether the goods were procured from alternative sources.

Vijay Proteins Ltd. v. CIT
58 Taxmann.com 44 · 2015 · High Court
140
citing judgments

When an assessee makes alleged bogus or hawala purchases but subsequently makes genuine sales from those purchases, the addition to income should be restricted only to the estimated profit embedded in such transactions, not the entire purchase value.

N.K. Industries Ltd. v. DCIT
72 Taxmann.com 289 · 2016 · High Court
127
citing judgments

When there is a categorical finding that purchases are bogus and from fictitious suppliers, the Assessing Officer is justified in making a 100% addition of the bogus purchase amount under Section 69C, rather than restricting the disallowance to merely the profit margin. This position has been upheld by the Supreme Court through the dismissal of the assessee's SLP.

Judgments citing unexplained expenditure

G.K. Reddy, Chennai vs. DCIT, CC-2(1), Chennai

In the result, both the appeals filed by the assessee are dismissed

ITA 3354/CHNY/2019[2010-11]Status: DisposedITAT Chennai28 Oct 2022AY 2010-11

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. Nos.3353 & 3354/Chny/2019 िनधा"रण वष"/Assessment Years: 2008-09 & 2010-11 Shri G.K. Reddy, Vs. The Assistant Commissioner Of T-27, 12Th Street, Anna Nagar, Income Tax, Chennai 600 040 Corporate Circle 2(1), [Pan:Aaqpk5707L] Chennai. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri S. Lakshminarasimhan, Ca ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 27.10.2022 घोषणा की तारीख /Date Of Pronouncement : 28.10.2022 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Assessee Are Directed Against Different Orders Of The Ld. Commissioner Of Income Tax (Appeals) 6, Chennai, Both Dated 31.10.2019 Relevant To The Assessment Years 2008- 09 & 2010-11. 2. When The Appeals Were Taken Up For Hearing, The Ld. Counsel For The Assessee Has Submitted That The Appeal For The Assessment Year 2010-11 In I.T.A. No. 3354/Chny/2019 May Be Permitted To Withdraw Against Which, The Ld. Dr Has Not Raised Any Objection. In View Of The Above Plea

For Appellant: Shri S. Lakshminarasimhan, CAFor Respondent: Shri AR V Sreenivasan, Addl. CIT
Section 69C

assessee has not provided any documentary evidence for source of payment. Accordingly, the Assessing Officer has added the expenditure claimed by the assessee as unexplained expenditure under section 69C of the Act. On appeal, the ld. CIT(A) has called for remand report, wherein, the Assessing Officer has stated that

G.K. Reddy, Chennai vs. DCIT, CC-2(1), Chennai

In the result, both the appeals filed by the assessee are dismissed

ITA 3353/CHNY/2019[2008-09]Status: DisposedITAT Chennai28 Oct 2022AY 2008-09

Bench: Shri V. Durga Rao & Shri Manoj Kumar Aggarwalआयकर अपील सं./I.T.A. Nos.3353 & 3354/Chny/2019 िनधा"रण वष"/Assessment Years: 2008-09 & 2010-11 Shri G.K. Reddy, Vs. The Assistant Commissioner Of T-27, 12Th Street, Anna Nagar, Income Tax, Chennai 600 040 Corporate Circle 2(1), [Pan:Aaqpk5707L] Chennai. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri S. Lakshminarasimhan, Ca ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 27.10.2022 घोषणा की तारीख /Date Of Pronouncement : 28.10.2022 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Assessee Are Directed Against Different Orders Of The Ld. Commissioner Of Income Tax (Appeals) 6, Chennai, Both Dated 31.10.2019 Relevant To The Assessment Years 2008- 09 & 2010-11. 2. When The Appeals Were Taken Up For Hearing, The Ld. Counsel For The Assessee Has Submitted That The Appeal For The Assessment Year 2010-11 In I.T.A. No. 3354/Chny/2019 May Be Permitted To Withdraw Against Which, The Ld. Dr Has Not Raised Any Objection. In View Of The Above Plea

For Appellant: Shri S. Lakshminarasimhan, CAFor Respondent: Shri AR V Sreenivasan, Addl. CIT
Section 69C

assessee has not provided any documentary evidence for source of payment. Accordingly, the Assessing Officer has added the expenditure claimed by the assessee as unexplained expenditure under section 69C of the Act. On appeal, the ld. CIT(A) has called for remand report, wherein, the Assessing Officer has stated that

Smt, Ramu Annamalai Umaiyal Radhai, Chennai vs. PCIT, Chennai

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

ITA 922/CHNY/2020[2015-16]Status: DisposedITAT Chennai12 Oct 2022AY 2015-16

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 922/Chny/2020 िनधा"रण वष"/Assessment Year:2015-16 Smt. Ramu Annamalai Umaiyal Radhai, The Principal Commissioner Of Flat No. Iii, 3Rd Floor, Poojapura Vs. Income Tax- Chennai I, Apartments, St. Mary’S Road, Chennai. Alwarpet, Chennai 600 028. [Pan:Aakpu6790M] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri V.P. Kuriachan, F.C.A. ""थ" की ओर से/Respondent By : Shri M. Rajan, Cit सुनवाई की तारीख/ Date Of Hearing : 26.09.2022 घोषणा की तारीख /Date Of Pronouncement : 12.10.2022 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Principal Commissioner Of Income Tax, Chennai - I, Chennai, Dated 20.05.2020 Relevant To The Assessment Year 2015-16 Passed Under Section 263 Of The Income Tax Act, 1961 [“Act” In Short].

For Appellant: Shri V.P. Kuriachan, F.C.AFor Respondent: Shri M. Rajan, CIT
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 263

source for the EMI payment, the total amount of ₹.16,53,134/- plus ₹.25,62,384/- = ₹.42,15,518/- should be treated as unexplained expenditure under section 69C of the Act and added to the income returned. Further, in the P&L account, the assessee has debited interest on income

Dy.CIT Cent. Cir 6(4), Mumbai vs. Indiabulls Financial Services Ltd, Mumbai

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

ITA 99/MUM/2022[2012-13]Status: DisposedITAT Mumbai07 Oct 2022AY 2012-13

Bench: Shri Kuldip Singh & Shri Gagan Goyaldy.Cit, Cc-6(4), Room No. 1925, 19Th Floor, Air India Building, Nariman Point, Mumbai-400021. ...... Appellant Vs. India Bulls Financial Services Ltd. M-62 & 63, 1St Floor, Connaught Place, New Delhi-110001 Pan: Aaaci8570Q ..... Respondent Appellant By : Sh. K.C. Kanojiya, Cit-Dr Respondent By : Sh. K. Gopal, Adv. Sh. Om Kandalkar, Adv. Date Of Hearing : 13/07/2022 Date Of Pronouncement : 07/10/2022 Order Per Gagan Goyal, A.M: This Appeal By The Revenue Is Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)-54, Mumbai [Hereinafter Referred To As [‘Cit(A)’] Dated 20.10.2021 Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter Referred To As [‘The Act’] For The Assessment Year (Ay) 2012-13. The Revenue Has Raised The Following Grounds Of Appeal:

For Appellant: Sh. K.C. Kanojiya, CIT-DRFor Respondent: Sh. K. Gopal, Adv
Section 143(3)Section 153ASection 245D(4)Section 250Section 69C

facts and in the circumstances of the case, whether the learned CIT (A) erred in deleting the addition on account of Unexplained Expenditure u/s.69C of Rs.95, 000/-, the details of which were maintained in the Cash Transaction Record maintained in an excel sheet by Shri Ashok Sharma, which was found ... rival contentions. We have also perused the orders of the lower authorities. Ground no.1 to 3 relates to the addition of ₹95,000/- as unexplained expenditure. We find that identical issue arose in the case of the assessee for A.Y. 2011-12, the learned CIT (A) has deleted the identical

Sanjiv Ramesh Kochhar, Mumbai vs. ACIT Circle 17(3), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 818/MUM/2022[2017-18]Status: DisposedITAT Mumbai04 Oct 2022AY 2017-18

Bench: Shrikuldip Singh & Shri Gagan Goyalsanjiv Ramesh Kochhar 202, A Wing, Eastern Court, Tejpal Road, Vile Parle (E), Mumbai-400057. Pan: Aadpk0769K ...... Appellant Vs. Acit, Circle-17(3) Room No. 122, 1St Floor, Kautilya Bhavan, C-141 To C-43, G Block, Bkc, Bandra (E), Mumbai-400051. ..... Respondent Appellant By : Sh. Govind Javeri Respondent By : Sh. Tejinder Pal Singh Date Of Hearing : 13/07/2022 Date Of Pronouncement : 04/10/2022 Order Per Gagan Goyal, A.M: This Appeal By The Assessee Is Directed Against The Order Of National Faceless Appeal Centre, Delhi [Hereinafter Referred To As [‘Nfac’] Dated 26.11.2021 Passed Under Section 250 Of The Income Tax Act, 1961 (Hereinafter

For Appellant: Sh. Govind JaveriFor Respondent: Sh. Tejinder Pal Singh
Section 143Section 250Section 271ASection 69C

issued notice separately levying penalty u/s 271AAC. 3. The learned assessing officer considered the payment of credit card by cash as a unexplained expenditure u/s 69C of the Income Tax Act, 1961 and made the addition of Rs.9,72,500/-. 4. The appellant preferred an appeal before the Commissioner ... made cash payment towards credit card due to the tune of Rs.9.72,500/- and the learned AO made addition treating this expenditure as unexplained expenditure U/s69C. Over the year assessee has been withdrawing certain amounts and keeping it aside to meet various contingencies. The cash collected over the years, already