“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

Saluja Steel and Power Pvt. Ltd., Giridih vs. ACIT, C, Dhanbad

In the result, appeal of the assessee is allowed

ITA 287/RAN/2025[13-14]Status: DisposedITAT Ranchi07 Jan 2026

Bench: SHRI GEORGE MATHAN (Judicial Member), SHRI RATNESH NANDAN SAHAY (Accountant Member)

For Appellant: Shri Devesh Poddar, AdvocateFor Respondent: Shri Rajib Jain, CIT-DR

Section 131Section 142(1)Section 143(3)Section 148Section 156

Credit (Section 68), Unexplained Investments (Section 69), Unexplained Money (Section 69A), Amount of Investment, etc. not fully disclosed in books of account (Section 698), Unexplained Expenditure, etc. (Section 69C). The requirement of each of the aforesaid sections are different and the rules of evidence and burden of proof are also

Deputy Commissioner of Income Tax, Patiala vs. Arun Bhandari, Patiala

In the result, both the appeals filed by the Assessee and Revenue are partly allowed

ITA 931/CHANDI/2024[2019-20]Status: DisposedITAT Chandigarh07 Jan 2026AY 2019-20

Bench: Hon’Ble Shri Laliet Kumar, Jm & Hon’Ble Shri Krinwant Sahay, Am आयकरअपीलसं./ Ita No.931/Chandi/2024 (िनधा"रणवष" / Assessment Year: 2019-20) Deputy Commissioner Of Income Arun Bhandari Patiala बनाम/ Vs. Tax, Patiala 10, Dhillon Marg, Model Town, Patiala, Punjab-147001 "ायीलेखासं./जीआइआरसं./Pan/Gir No. Akupb-0470-D (अपीलाथ"/Appellant) (""थ" / Respondent) : & आयकरअपीलसं./ Ita No.832/Chandi/2024 (िनधा"रणवष" / Assessment Year: 2019-20) Arun Bhandari Patiala Acit, Dcit Central Circle बनाम/ Vs. 10, Dhillon Marg, Model Town, Patiala Patiala, Punjab-147001 "ायीलेखासं./जीआइआरसं./Pan/Gir No. Akupb-0470-D (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Rakesh Cajla (Advocate) ""थ"कीओरसे/Respondent By : Sh. Vivek Vardhan (Addl. Cit) Sr. Dr सुनवाईकीतारीख/Date Of Hearing : 03-11-2025 घोषणाकीतारीख /Date Of Pronouncement 07 -01-2026 : आदेश / O R D E R Krinwant Sahay () The Present Appeal Has Been Filed By The Revenue & Cross Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A)-5

For Appellant: Sh. Rakesh Cajla (Advocate)For Respondent: Sh. Vivek Vardhan (Addl. CIT) Sr. DR

Section 127Section 129Section 133ASection 142(1)Section 143(2)Section 144Section 69C

dated 22.02.2022. Accordingly, an addition of Rs. 11,17,812 is hereby made to the income of the assessee for the relevant period as unexplained expenditure and hence deemed u/s 69C of the act. 11. The Ld. CIT(A) has confirmed it. During proceedings before us, the Ld. counsel

Arun Bhandari, Patiala vs. ACIT DCIT Central Circle Patiala, Patiala

In the result, both the appeals filed by the Assessee and Revenue are partly allowed

ITA 832/CHANDI/2024[2019-20]Status: DisposedITAT Chandigarh07 Jan 2026AY 2019-20

For Appellant: Sh. Rakesh Cajla (Advocate)For Respondent: Sh. Vivek Vardhan (Addl. CIT) Sr. DR

Section 127Section 129Section 133ASection 142(1)Section 143(2)Section 144Section 69C

ACIT., Circle-6(1), Hyderabad vs. Vk Warehousing Enterprises, Hyderabad

In the result, both the appeals filed by the assessee firm and

ITA 881/HYD/2025[2017-18]Status: DisposedITAT Hyderabad07 Jan 2026AY 2017-18

For Appellant: Shri Rajesh Vaishnav, C.AFor Respondent: Shri P. Dhivahar, CIT-DR

Section 143(2)Section 144Section 234BSection 271(1)(b)Section 40Section 68Section 69Section 69CSection 801B

assessment made the following additions/disallowances, viz. (i) disallowance of amount claimed under the head “any other amount allowable as deduction", treating the same as unexplained expenditure under Section 69C of the Act: Rs. 34,58,38,297/-; (ii) disallowance of depreciation: Rs. 3,11,24,473/-; (iii) disallowance under Section

Vk Warehousing Enterprises, Hyderabad vs. DCIT., Circle-6(1), Hyderabad

In the result, both the appeals filed by the assessee firm and the revenue are partly allowed for statistical purposes, in terms of our observations recorded hereinabove

ITA 737/HYD/2025[2017-18]Status: DisposedITAT Hyderabad07 Jan 2026AY 2017-18

Bench: Shri Manjunatha G & Shri Ravish Soodआ.अपी.सं /Ita No.737/Hyd/2025 (िनधा"रण वष"/Assessment Year:2017-18) M/S. V K Warehousing Enterprises, Dy. Commissioner Of Income Tax, Vs. Circle 6(1), Hyderabad. Hyderabad. Pan : Aakfv3288R (Appellant) (Respondent) आ.अपी.सं /Ita No.881/Hyd/2025 (िनधा"रण वष"/Assessment Year:2017-18) Dy. Commissioner Of Income Tax, M/S. V K Warehousing Enterprises, Circle 6(1), Hyderabad. Vs. Hyderabad. (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Rajesh Vaishnav, C.A. राज" व "ारा/Revenue By: Shri P. Dhivahar, Cit-Dr सुनवाई की तारीख/Date Of Hearing: 22/12/2025 घोषणा की तारीख/Pronouncement: 07/01/2026

For Appellant: Shri Rajesh Vaishnav, C.AFor Respondent: Shri P. Dhivahar, CIT-DR

Section 143(2)Section 144Section 234BSection 271(1)(b)Section 40Section 69Section 69CSection 801B

assessment made the following additions/disallowances, viz. (i) disallowance of amount claimed under the head “any other amount allowable as deduction”, treating the same as unexplained expenditure under Section 69C ITA Nos.737 & 881/Hyd/2025 4 of the Act: Rs. 34,58,38,297/-; (ii) disallowance of depreciation

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exemptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2765/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Jan 2026AY 2020-21

Bench: Shri Ss Viswanethra Ravi & Ms. Padmavathy.Sआयकर अपील सं./Ita Nos.2759, 2760, 2761, 2762, 2763, 2764 & 2765/Chny/2025 िनधा%रण वष% /Assessment Years: 2018-19 & 2020-21

For Appellant: Mr. Richard Joseph, AdvocateFor Respondent: Ms. Latchana, JCIT

Section 143(3)Section 250Section 270A

completed the assessee by making the following disallowances. (i) Excess expenditure disallowed – Rs.1,84,27,083 (ii) Interest disallowed – Rs.94,21,727 (iii) Unexplained expenditure u/s.69C – Rs.1,84,01,729 7. The A.O also initiated penalty proceedings u/s. 270A, 270AAC(1), 272A(1)(c) and 272A

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exmeptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2764/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Jan 2026AY 2020-21

For Appellant: Mr. Richard Joseph, AdvocateFor Respondent: Ms. Latchana, JCIT

Section 143(3)Section 250Section 270A

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exemptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2763/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Jan 2026AY 2020-21

For Appellant: Mr. Richard Joseph, AdvocateFor Respondent: Ms. Latchana, JCIT

Section 143(3)Section 250Section 270A

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exemptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2762/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Jan 2026AY 2020-21

For Appellant: Mr. Richard Joseph, AdvocateFor Respondent: Ms. Latchana, JCIT

Section 143(3)Section 250Section 270A

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exemptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2761/CHNY/2025[2020-21]Status: DisposedITAT Chennai07 Jan 2026AY 2020-21

For Appellant: Mr. Richard Joseph, AdvocateFor Respondent: Ms. Latchana, JCIT

Section 143(3)Section 250Section 270A

Surabi Educational and Charitable Trust, Dindigul vs. ACIT, Exemptions, Coimbatore

In the result, all the appeals of the assessee for AY 2018-19 and AY

ITA 2759/CHNY/2025[2018-19]Status: DisposedITAT Chennai07 Jan 2026AY 2018-19

Bench: Shri Ss Viswanethra Ravi & Ms. Padmavathy.Sआयकर अपील सं./Ita Nos.2759, 2760, 2761, 2762, 2763, 2764 & 2765/Chny/2025 निर्धारण वर्ष / Assessment Years: 2018-19 & 2020-21 Surabi Educational & Charitable Trust, S7/2 Prnp Complex, Kumaran Thiru Nagar, Silavathur Road, Dindigul – 624 005. Pan: Aafts 0804D (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee By प्रत्यर्थी की ओर से /Respondent By सुनवाई की तारीख/Date Of Hearing घोषण की तारीख / Date Of Pronouncement Per Padmavathy.S, A.M: The Asst. Commissioner Of Income Vs. Tax (Exemptions), Coimbatore. (प्रत्यर्थी/Respondent) Mr. Richard Joseph, Advocate Ms. Latchana, Jcit 16.12.2025 07.01.2026 आदेश / Order These Appeals By The Assessee Are Against The Separate Orders Of The Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre (Nfac), Delhi, (In Short "Cit(A)") Passed U/S. 250 Of The Income Tax Act, 1961 (In Short "The Act") For Assessment Years (Ay) 2018-19 & 2020-21. The Order Of The Cit(A) Is Emanating From The Order Of The A.O Passed U/S. 143(3) & The Penalty Orders U/S. 270A, 271Aac(1), 272A(1)(D) & 272A(1)(C) Of The Act. For The Purpose Of Adjudication, We Will First Consider The Appeal Filed For A.Y 2018-19.

Section 143(3)Section 250Section 270A

Assisstant Commissioner of Income Tax Corporate Circle 1 1, Chennai vs. M/S Ei Instrumentation Private Limited, Chennai

In the result, appeal filed by the Revenue is dismissed

ITA 1554/CHNY/2025[2018-19]Status: DisposedITAT Chennai07 Jan 2026AY 2018-19

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

For Appellant: Ms.Janani, AdvocateFor Respondent: Ms.Kavitha, Addl.CIT

Section 139Section 148Section 69C

treated the transaction/purchases shown from M/s.Barbrik to the tune of ₹1,20,99,998/- as bogus and added it u/s.69C of the Act i.e. unexplained expenditure. 5. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who didn’t countenance the action of the AO disallowing the entire purchase ... assertion of the assessee that transaction with M/s.Barbrik was genuine and disallowed the entire sale consideration given to M/s.Barbrik and made an addition u/s.69C (unexplained expenditure) of the entire amount of ₹1,20,99,998/-. On appeal, the Ld.CIT(A) has restricted the addition to 8.87% of the gross-profit

Income Tax Officer-19(1)(1), Mumbai vs. Babulal Mishrimalji Mehta, Mumbai

In the result, the grounds of appeal raised by the revenue are

ITA 6131/MUM/2025[2019-20]Status: DisposedITAT Mumbai07 Jan 2026AY 2019-20

Bench: Shri Pawan Singh & Shri Arun Khodpia(Physical Hearing) Income Tax Officer-19(1)(1), Babulal Mishrimalji Mehta 501, 5Th Floor, Piramal Chamber, Vs 7 Marker Building, Office No.91St Lalbaug, Mumbai Panjarapole Lane, Mumbai [Pan:Afbpm0921N] Appellant / Assessee Respondent / Revenue

Section 254(1)Section 68Section 69C

would also have to be considered non- existent. This is contrary to established legal principles, as the addition was made under section 69C for unexplained expenditure, and the assessee failed Babulal Mishrimalji Mehta (A.Y. 2019-20) to provide a plausible explanation for the same. The addition of unexplained expenditure ... been allowed, by rejecting the ITAT's decision of estimating the profit rate @12.5% on bogus purchases and thereby impliedly grant deduction of such unexplained expenditure incurred u/s. 69C of the Act, even though the assessee failed to discharge its onus to prove the genuineness of alleged purchases

Income Tax Officer(E) Ward- 2(4), New Delhi, Civic Centre New Delhi vs. Prakash Sewa Trust, Paschim Vihar

ITA 4305/DEL/2024[2016-17]Status: DisposedITAT Delhi07 Jan 2026AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwal

Section 11Section 12ASection 143(3)

stating whether it is a case of cash credit, unexplained investments, unexplained money, amount of investment, etc. not fully disclosed in books of account, unexplained expenditure, etc. The impugned Order is therefore without authority of law and bad in law. The impugned order is thus unreasoned, non-speaking and therefore ... Credit (Section 68), Unexplained Investments (Section 69), Unexplained Money (Section 69A), Amount of Investment, etc., not fully disclosed in books of account (Section 69B), Unexplained Expenditure, etc. (Section 69C). The requirement of each of the aforesaid sections are different and the rules of evidence and burden of proof are also

Income Tax Officer, Civic Centre, New Delhi vs. Naveen Arora, Lajpat Nagar, Delhi

Appeal is partly allowed

ITA 3251/DEL/2024[2017-18]Status: DisposedITAT Delhi07 Jan 2026AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Amitabh Shukla

Section 144Section 172Section 195Section 69ASection 69C

HDFC bank and ICICI bank respectively during the demonetization period. The other issue was of disallowance of Rs.2,79,47,174/- on account of unexplained expenditure u/s.69C of the Act as the assessee failed to deduct tax at source on the remittances made by it to foreign nationals/ entities. Aggrieved ... with the order the assessee has raised this appeal. 3.3 For clarity of the issue ground No.2 raised by the assessee against unexplained expenditure for lack of deduction of tax at source u/s.195 is analysed and discussed first. The assessee during the appeal proceedings has stated that to understand

Neetal Relan, New Delhi vs. ACIT, Central Circle-14, New Delhi

In the result, both the appeal of the assessee in ITA No

ITA 3038/DEL/2023[2018-19]Status: DisposedITAT Delhi07 Jan 2026AY 2018-19

Bench: Shri Sudhir Kumar & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 153CSection 250

erred in not considering the fact that the findings of assessing officer are contradictory as the additions has been made on account of unexplained expenditure while in the body of order at para no. 7.14 the same has been held as unexplained money in the hands of the assessee added ... confirmed by the CIT(A) Under Section 69A. The CIT(A) is not sure as to whether the amount is unexplained expenditure or ITA No.3037 & 3038/Del/2023 Neetal Relan Vs ACIT unexplained investment. The addition confirmed on the basis of summaries and conjunctions is requested to be deleted. 15. That

Neetal Relan, New Delhi vs. ACIT, Central Circle-14, New Delhi

In the result, both the appeal of the assessee in ITA No

ITA 3037/DEL/2023[2017-18]Status: DisposedITAT Delhi07 Jan 2026AY 2017-18

Bench: Shri Sudhir Kumar & Shri Manish Agarwal

Section 142(1)Section 143(2)Section 153CSection 250

M/S Anjeneya Ispat Ltd., Saraikela vs. Deputy Commissione of Income Tax, Circele-1, Jamshedpur

In the result, the appeal of the assessee is allowed

ITA 75/RAN/2022[2009-10]Status: DisposedITAT Ranchi06 Jan 2026AY 2009-10

Bench: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahayi.T.A. No.75/Ran/2022 Assessment Year: 2009-10 M/S Anjeneya Ispat Ltd.…………….…….…............................……….……Appellant 29, Rain Basera, Sanjay Nagar Colony, Adityapur, Saraikela, Jharkhand- 831013. [Pan: Aagca1031N] Vs. Dcit, Circle-1, Jamshedpur.….....…..…..….........……........……...…..…..Respondent Appearances By: Shri Devesh Poddar, Adv., Appeared On Behalf Of The Appellant. Shri Kanhaiya Lal Kanak, Cit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 18, 2025 Date Of Pronouncing The Order : January 06, 2026 Order Per Sonjoy Sarma: This Appeal Filed By The Assessee Is Directed Against The Order Of The Cit(A), Jamshedpur (Hereinafter Referred To As “Cit(A)”) Dated 25.09.2017 Passed Under Section 250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As The “Act”). 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For The Assessment Year 2019–20 Declaring A Total Income Of ₹62,64,116. The Case Was Selected For Complete Scrutiny. During The Relevant Previous Year, A Survey Operation Under Section 133A Of The Income-Tax Act, 1961 Was Conducted At The Business Premises Of The Assessee On 16.02.2019. Subsequently, Statutory Notices Under Sections 143(2) & 142(1) Of The Act Were Issued. In Response Thereto, The Assessee Appeared From Time To Time & Furnished Various Details & Documents As Called For. The Same Were Examined & Discussed By The Assessing Officer During The Course Of Assessment Proceedings. During

Section 10(23)Section 133ASection 133A(3)Section 145ASection 14ASection 250Section 40Section 69Section 69C

entries were yet to be passed, resulting in such difference. The explanation was not accepted by the Assessing Officer, who treated the amount as unexplained expenditure and made an addition of ₹4,08,000 under section 69C of the Act. The Assessing Officer noticed that the assessee had paid asset

Preeti Milan Sankhala, Pune vs. ITO Ward 14(3), Pune

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

ITA 939/PUN/2025[2017-18]Status: DisposedITAT Pune06 Jan 2026AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.939/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Suhas P. BoraFor Respondent: Shri Manish Sinha

Section 131Section 133ASection 144BSection 147Section 148Section 151ASection 69C

appeal of the appellant without appreciating that the Ld.AO has incorrectly invoked the provisions of Section 69C of the Act which is related to unexplained expenditure. In the present case, the appellant has made investment in the property and has not incurred any expenditure

Sudhakar Bajirao Shisode, Nashik vs. Income Tax Officer, Nashik

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

ITA 2780/PUN/2025[2018-19]Status: DisposedITAT Pune06 Jan 2026AY 2018-19

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.2780/Pun/2025 Assessment Year : 2018-19

For Appellant: Shri Bhagyesh DeshmukhFor Respondent: Shri Manish Sinha

Section 144BSection 147Section 2Section 250Section 69CSection 80C

premium receipts and other documents to prove the correctness of claim made u/s.80C of the Act. 3. So far as issue of unexplained expenditure is concerned, he submitted that the said addition has been made for not 2 Sudhakar Bajirao Shisode explaining the source of investment. He submitted that ... alleged unexplained expenditure relates to purchase of Vehicle at ₹14,75,436. Source of said purchase is mainly the finance from Mahindra & Mahindra Financial Services Ltd. at ₹9.00 lakh and ₹6.30 lakh received from sale of old Renault Dustar Car. He stated that all these facts are duly mentioned