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“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

Indira Bai Jindal, Khargone vs. Income Tax Officer, NFAC

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

ITA 134/IND/2025[2013-14]Status: DisposedITAT Indore17 Dec 2025AY 2013-14

Bench: Shri Siddhartha Nautiyal & Shri Bhagirath Mal Biyani

For Appellant: None (Written request)For Respondent: Shri Ashish Porwal, Sr. DR
Section 142(1)Section 144BSection 147Section 148Section 271(1)(c)Section 271F

commission in such accommodation entry transactions, the Assessing Officer estimated commission expenditure at 3% amounting to ₹1,05,000/- and treated the same as unexplained expenditure. Accordingly, the assessment was completed under section 147 read with section 144B of the Act, making additions of ₹35,00,000/- as unexplained money ... unexplained expenditure, and the Assessing Officer also initiated penalty proceedings under section 271(1)(c) and section 271F of the Act. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(Appeals) raising multiple grounds. Grounds of Appeal

Income Tax Officer 23(2)(1), Mumbai, Lalbaug, Piramal Chambers Mumbai vs. Nine Dimensions Housing LLP, Bandra East, Mumbai

In the result, appeal filed by the Revenue-Department stands dismissed

ITA 3686/MUM/2023[2017]Status: DisposedITAT Mumbai16 Dec 2025

Bench: Shri Narender Kumar Choudhry (Jm) & Shri Prabhash Shankar (Am) Ito 23(2)(1) Nine Dimensions Housing Llp Room No. 512 103/1St Floor, Renuka Chsl Piramal Chambers Vs. Kalanagar, Near Gurunanak Ss Rao Road, Lalbaug Hospital, Bandra East Mumbai-400 012. Mumbai-400 051. Pan : Aamfn1691A Appellant Respondent Assessee By : Shri Satyaprakash Singh, Ld. Ca Revenue By : Shri Leyaqat Ali Aafaqui , Ld. Sr. Dr Date Of Hearing : 29/09/2025 Date Of : 16/12/2025 Pronouncement O R D E R Per Narender Kumar Choudhry (Jm) :-

For Appellant: Shri Satyaprakash Singh, Ld. CAFor Respondent: Shri Leyaqat Ali Aafaqui , Ld. SR. DR
Section 115BSection 133(6)Section 143(3)Section 250Section 263Section 37(1)Section 43(1)Section 68

144B of the Act, complied with the directions of the Ld. PCIT and consequently made the disallowance of Rs. 1,02,82,440/- being unexplained expenditure under section 69C of the Act and also reiterated the disallowance of unsecured loans under section 68 of the Act as per section

Mr. Rajiv Ramesh Kochhar, Mumbai vs. ACIT Circle 25(3), Mumbai

ITA 4025/MUM/2025[2017-18]Status: DisposedITAT Mumbai15 Dec 2025AY 2017-18

Bench: Shri Amit Shukla, Jm& Shri Arun Khodpia, Am

For Appellant: Mr. Vishwas Mehendale, AdvFor Respondent: Assessee by
Section 143(2)Section 143(3)Section 57

interest paid on said loan, therefore the amount of Rs. 51,05,005/- was also added back to the income of assessee as unexplained expenditure. 3. Aggrieved with the aforesaid additions, assessee preferred an appeal before the ld. CIT(A) but remain unsuccessful to convince him about the additional expenses

DCIT, Noida vs. Ankur Mittal, Greater Noida

In the result, the appeal of the Revenue as well as Assessee’s

ITA 1104/DEL/2025[2017-18]Status: DisposedITAT Delhi12 Dec 2025AY 2017-18

Bench: Shri Sudhir Kumar & Shri Manish Agarwalassessment Year: 2017-18

Section 143(3)Section 147Section 263Section 69ASection 69C

deposited in bank accounts of the assessee with Canara Bank and Syndicate Bank u/s 69A of the Act and Rs.12,12,46,867/- as unexplained expenditure u/s 69C of the Act for purchases made by the assessee in cash, without appreciating the facts mentioned by the AO in the assessment

Income Tax Officer, Ward 46(1), New Delhi vs. Mam Raj Chunni Lal Exim, New Delhi

In the result the appeal of the Revenue is dismissed and the cross objection of the assessee is partly allowed

ITA 3573/DEL/2024[2016-17]Status: DisposedITAT Delhi12 Dec 2025AY 2016-17

Bench: Sh. Sudhir Kumar & Sh. Manish Agarwalassessment Year: 2016-17 Income Tax Officer, Vs Mam Raj Chunni Lal Exim Ward- 46 (1) Shop No. 5183, Ground New Delhi Floor, Lahori Gate, Naya Bazar, Delhi -110006 Pan No.Aaxfm0533B (Appellant) (Respondent)

Section 133ASection 147Section 148Section 148ASection 149(1)Section 151Section 151A

impugned addition of Rs.144,15,042/- on merit also made by Ld. AO on account of alleged bogus purchase by treating the same as unexplained expenditure. (3) That having regard to the facts and circumstances of the case Ld. CIT(A) ought to have deleted the impugned addition of Rs.44

Deputy Commissioner of Income Tax Central Circle 15, New Delhi vs. Deepti Agrawal, New Delhi

The appeal of the revenue is dismissed

ITA 2541/DEL/2024[2017-18]Status: DisposedITAT Delhi12 Dec 2025AY 2017-18

Bench: Shri S Rifuar Rahman & Shri Anubhav Sharmadcit Vs. Deepti Agrawal R. No. 245, 2Nd Floor, E-2 1-A, Maharaja Lal Lane Block, Ara Centre, Civil Lines Jhandewalan Extension New Delhi – 110054 New Delhi – 110055 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aampa0573C Appellant .. Respondent

For Appellant: Sh. Lalit Moha, CAFor Respondent: Sh. Rajesh Kumar Dhanesta, Sr
Section 10(38)Section 147Section 69C

Capital Tradelink Pvt. Ltd. & M/s Alankit Ltd. P a g e | 3 Deepti Agrawal (AY: 2017-18) and Rs. 7,46,370/- as unexplained expenditure u/s 69C of the Income-tax Act, 1961 on account of cost of arranging accommodation entry by the assessee. 2. Whether on the facts

Green Land Society ( N.G.O), Dhubri vs. Ward-2(3) Xempt, Guwahati

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

ITA 276/GTY/2025[2018-19]Status: DisposedITAT Guwahati11 Dec 2025AY 2018-19

Bench: Shri Manomohan Das & Shri Rakesh Mishra

Section 139Section 147Section 148Section 250Section 69C

circumstances of the case as well as on the points of law the assessing officer erred in making an addition of ₹11034000/- as unexplained expenditure u/s 69C of the income tax act 1961 and the Ld. CIT(A) also erred in confirming the same. 3. For that any other grounds ... since no satisfactory explanation was provided, therefore, the source of cash withdrawn amounting to ₹1,10,34,000/- remained unexplained and was treated as unexplained expenditure u/s 69C of the Act and added to the total income of the assessee. Aggrieved with the assessment order, the assessee filed an appeal

Income Tax Officer, 1(1)(3), Ahmedabad vs. Shweta Manish Jain, Ahmedabad

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

ITA 1594/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad11 Dec 2025AY 2018-19

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Ravindra, Sr. DRFor Respondent: None
Section 147Section 14ASection 69C

that there was no documentary evidence to show that the assessee had entered into any transaction with Shri Kirit D. Patel or incurred any unexplained expenditure. The Ld. CIT(A) observed that no primary evidence, no bank trail, and no statement implicating the assessee had been provided by the Assessing

Madhushree Enterprises, Kampli, Hospet vs. DCIT, Bengaluru

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

ITA 697/BANG/2024[2011-12]Status: DisposedITAT Bangalore11 Dec 2025AY 2011-12

Bench: Shri Prashant Maharishi, Vice – & Shri Soundararajan K.Assessment Year : 2011-12

For Appellant: NoneFor Respondent: Shri Muthu Shankar, CIT-DR
Section 142(1)Section 143(2)Section 144Section 148Section 276CSection 37(1)Section 41(1)

purchases shown in the stock register is more than the purchases shown in the purchase register and therefore proposed to disallow the expenditure as unexplained expenditure. The AO had made the assessment accordingly. Page 4 of 7 4. As against the said order, the assessee filed an appeal before ... explanation for the difference between the stock register and the purchases reported in the P&L account and therefore confirmed the addition under the unexplained expenditure. Insofar as the protective addition made by the AO by an order dated 30/03/2013, the Ld.CIT(A) had rejected the said claim since

Deputy Commissioner of Income Tax, Circle 3(1), Visakhapatnam vs. Doddi Roopa, Visakhapatnam

In the result, the appeal filed by the revenue is dismissed in terms of our aforesaid observations

ITA 413/VIZ/2024[2019-20]Status: DisposedITAT Visakhapatnam10 Dec 2025AY 2019-20

Bench: Shri Manjunatha G. & Shri Ravish Soodआ.अपी.सं /Ita No.413/Viz/2024 (िनधा"रण वष"/Assessment Year: 2019-20) Deputy Commissioner Of Vs. Smt. Doddi Roopa, Income Tax, Visakhapatnam. Circle-3(1), Visakhapatnam. Pan: Atfpr7237N (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Gvn Hari, Advocate राज" व "ारा/Revenue By: Shri Badicala Yadagiri, Cit-Dr सुनवाई की तारीख/Date Of Hearing: 15/10/2025 घोषणा की तारीख/Date Of 10/12/2025 Pronouncement:

For Appellant: Shri GVN Hari, AdvocateFor Respondent: Shri Badicala Yadagiri
Section 131Section 133(6)Section 147Section 148Section 148A

Enterprises; and (ii) M/s. Vihan Enterprises. Accordingly, the AO made an addition of Rs. 4,99,65,247/- by treating the same as an unexplained expenditure under section 69C r.w.s 115BBE of the Act. Accordingly, the AO vide his order under section 147 r.w.s 144 of the Act, dated 07/03/2024

ACIT, Circle-1, Nashik vs. Taparia Tools Limited, Nashik

In the result, both the appeal of the Revenue as well as Cross Objection of the assessee are allowed for statistical purposes as per the terms indicated above

ITA 1337/PUN/2025[2017-18]Status: DisposedITAT Pune10 Dec 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1337/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Amit BobdeFor Respondent: Shri Viral Shah
Section 142(1)Section 147Section 148Section 37(1)

here the most important thing is that payments to said parties /entities cannot be said to be made from accounted money. Thus, aspect of unexplained expenditure u/s 69-C come into picture along with other aspects u/s 40A(3) etc. Thus, in the fitness of things, purchases as such ... made from other parties/entities (other than SKTPL) and then payments to such parties would have been made from unaccounted money and therefore aspect of unexplained expenditure u/s.69C comes into picture along with other aspects of section 40A(3). However, ld. AO has finally made addition by disallowing the purchases u/s.37

Classic Bio-Tech Exports Limited, Bangalore vs. ITO., Ward-1(1), Hyderabad

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

ITA 1362/HYD/2024[2018-19]Status: DisposedITAT Hyderabad10 Dec 2025AY 2018-19

Bench: SHRI VIJAY PAL RAO, HON’BLE (Vice President), SHRI MANJUNATHA G, HON’BLE (Accountant Member)

Section 69C

rejected the explanation of the assessee and assessed the amount claimed as agricultural income under Section 69C of the Income-tax Act, 1961 as unexplained expenditure. 4. Aggrieved by the order of assessment, the assessee preferred the appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee ... operations were furnished to the A.O. The A.O. disbelieved the evidence furnished by the assessee and assessed the amount claimed as agricultural income as unexplained expenditure under Section 69C of the Income Tax Act. The Ld. CIT(A) after considering submissions of the assessee and also taking note of various

ACIT, Central Circle-3(2), Chennai vs. Stn Properties Private Limited, Chennai

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

ITA 1648/CHNY/2024[2014-15]Status: DisposedITAT Chennai10 Dec 2025AY 2014-15

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. Nos.1647 & 1648/Chny/2024 िनधा"रण वष"/Assessment Year: 2012-13 & & 2014-15 The Assistant Commissioner Of Vs. Stn Properties Private Limited, 6/24, Eb Colony, 1St Main Road, Income Tax, Central Circle 3(2), Adambakkam, Tambaram, Chennai. Chennai 600 088. [Pan:Aakcs6317F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Ms. E. Pavuna Sundari, Cit ""थ" की ओर से/Respondent By : Shri K.G. Raghunath, Advocate सुनवाई की तारीख/ Date Of Hearing : 18.09.2025 घोषणा की तारीख /Date Of Pronouncement : 10.12.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: Both The Appeals Filed By The Revenue Are Directed Against Different Orders Both Dated 31.03.2024 Passed By The Ld. Commissioner Of Income Tax(Appeals)–20, Chennai For The Assessment Years 2012-13 & 2014-15. 2. Since Issues Raised In Both The Appeals Of The Revenue Are Similar Based On The Same Identical Facts, With The Consent Of Both The Parties, We Proceed To Hear The Appeals Together & Pass Consolidated Order For The Sake Of Convenience.

For Appellant: Ms. E. Pavuna Sundari, CITFor Respondent: Shri K.G. Raghunath, Advocate
Section 132Section 143(2)Section 144Section 153ASection 153C

named projects to which they are related, offered additional income wherever he could not explain sources for amount paid to other parties either as unexplained expenditure or investment, similarly offered 'additional income' on account of cash receipts found in seized pen drives. Assessment under section 153A ... verified in the hands of Shri S.T. Nedunselian and not in the hands of the assessee company. 13. With regard to the unexplained expenditure towards payments made to Sri Gopi, the copies of ledger accounts produced before the Investigating Officer, referred to as Annexure D in statement as well

ACIT, Central Circle-3(2), Chennai vs. Stn Properties Private Limited, Chennai

ITA 1647/CHNY/2024[2012-13]Status: DisposedITAT Chennai10 Dec 2025AY 2012-13
Section 132Section 143(2)Section 144Section 153ASection 153C

named projects to which they are related, offered additional income wherever he could not explain sources for amount paid to other parties either as unexplained expenditure or investment, similarly offered 'additional income' on account of cash receipts found in seized pen drives. Assessment under section 153A ... verified in the hands of Shri S.T. Nedunselian and not in the hands of the assessee company. 13. With regard to the unexplained expenditure towards payments made to Sri Gopi, the copies of ledger accounts produced before the Investigating Officer, referred to as Annexure D in statement as well

DCIT CC 7(3), Mumbai vs. M/S Om Trilok Realty & Infrastructure, Mumbai

ITA 4048/MUM/2019[2014-15]Status: DisposedITAT Mumbai10 Dec 2025AY 2014-15

Bench: Shree Pawan Singh, Jm & Shri Arun Khodpia, Am Deputy Commissioner M/S Om Trilok Realty & Of Income Tax, Cc-7(3), Infrastructures, Shop No. 6Th Room No. 655, 8, Botawala Building, V Floor, Aayakar Bhavan, 82086, Raghavji Road, S M. K. Road, Mumbai- Gowalia Tank, 400020, Maharashtra Mumbai-400036 Pan No. Aabfo8779M (Appellant) : (Respondent) Assessee By : Shri Rushabh Mehta : Shri R A Dhyani, Cit-Dr Respondent By : 17.09.2025 Date Of Hearing Date Of : 10.12.2025 Pronouncement

For Appellant: Shri Rushabh MehtaFor Respondent: 17.09.2025
Section 131Section 132Section 143(1)Section 143(2)Section 143(3)Section 153A(1)(a)Section 250Section 68Section 69C

While enhancing the income of assessee Ld. AO made the following additions: i. Disallowance u/s 69C: 10,90,695/- on account of unexplained expenditure ii. Disallowance u/s 68: 1,00,00,000/- on account of unsecured loans, taxed as income of the assessee for the year under consideration

Deputy Commissioner of Income Tax, Aurangabad vs. Dhananjay Babruvan Kender, Beed

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

ITA 1032/PUN/2024[2019-20]Status: DisposedITAT Pune09 Dec 2025AY 2019-20

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2019-20 Dcit, Aurangabad Dhananjay Babruvan Kender Bunglow No.69, Yogeshwari Nagari Vs. Ring Road, Ambajogai, Beed – 431517 Pan: Bwlpk1384D (Appellant) (Respondent) Assessee By : Shri Hari Krishan Department By : Shri Amol Khairnar, Cit-Dr Date Of Hearing : 27-11-2025 Date Of Pronouncement : 09-12-2025 O R D E R Per R.K. Panda, Vp:

For Appellant: Shri Hari KrishanFor Respondent: Shri Amol Khairnar, CIT-DR
Section 132Section 133ASection 142(1)Section 153ASection 69Section 69C

income of Rs.1,30,28,380/-. 6. In appeal the Ld. CIT(A) deleted the additions made by the Assessing Officer in respect of unexplained expenditure u/s 69C and difference in the contract receipt. So far as the addition of Rs.79,82,000/- made by the Assessing Officer ... appellant. As the appellant has successfully demonstrated that the expenses are allowable regular business expenses and the AO has treated the same as unexplained expenditure without any corroborative evidence, the addition of Rs.79,82,000/- made by the AO is hereby deleted. Ground No.1 of the appeal is, therefore, ALLOWED

Allen Petrochemicals Pvt. Ltd., Meerut vs. DCIT, Central Circle, Meerut

Appeal is allowed

ITA 4078/DEL/2025[2018-19]Status: DisposedITAT Delhi09 Dec 2025AY 2018-19

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwal

For Appellant: NoneFor Respondent: Sh. Gouranga Chandra Das, Sr. DR
Section 153CSection 153C(1)(a)Section 69C

vehemently argues that both the lower authorities have rightly made section 69C r.w.s. 115BBE of the Act, 2 Allen Petrochemicals Pvt. Ltd. unexplained expenditure addition representing assessee’s cash payments to the searched party, in the assessment order dated 26.03.2024 as upheld in the lower appellate discussion. 4. We have

ITO., Ward-9(1), Hyderabad vs. Manisha Dixit, Vanasthalipuram

In the result, the appeal of the Revenue is allowed for

ITA 735/HYD/2025[2021-22]Status: HeardITAT Hyderabad05 Dec 2025AY 2021-22

Bench: Shri Ravish Sood

For Appellant: Shri Rama Murthy T, CAFor Respondent: Dr. Narendra Kumar Naik, CIT
Section 143(2)Section 143(3)Section 69C

Rs.7,00,52,477/- from thirteen parties. As the assessee could not furnish certain evidences, the Ld. AO treated the said purchases as unexplained expenditure under Section 69C of the Act and disallowed the same. The assessment of the assessee was completed under Section 143(3) r.w.s. 144B

Rajia Sultana Khatun, Purba Medinipur vs. ITO, Ward 27(3), Haldia

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

ITA 1746/KOL/2025[2018-2019]Status: DisposedITAT Kolkata05 Dec 2025AY 2018-2019

Bench: Shri Rajesh Kumar (Accountant Member), Shri Pradip Kumar Choubey (Judicial Member)

Section 147Section 148Section 250Section 40A(3)Section 68Section 69C

consideration and the appellant did not able to explain the source of cash withdrawals, hence, the Assessing Officer added Rs. 61,50,000/- as unexplained expenditure u/s 69C of the Act. The Assessing Officer also added Rs.11,000/- as interest received to the total income of the assessee. 3. Being

Shankeshwar Exim LLP, Mumbai vs. ITO - 19(3)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 5117/MUM/2025[2018-19]Status: DisposedITAT Mumbai05 Dec 2025AY 2018-19

Bench: Smt. Beena Pillai, Jm & Ms Padmavathy S, Am

For Respondent: Shri Arun Kanti Datta, CIT-DR
Section 148Section 250Section 69C

erred in conforming the action of the Ld. AO in making addition of Rs. 8,68,28,328/- as Unexplained Expenditure u/s 69C of the Income Tax Act, by treating the legitimate Sale transaction of appellant with M/s Shri Ratnraj Gems Pvt. Ltd., Suryakoti Trading Pvt. Ltd., Gurukul Exim ... circumstances of the case and in law the Ld. CIT(A) has erred in conforming the addition of Rs. 8,68,28,328/- as Unexplained Expenditure u/s 69C of the Income Tax Act, by treating the legitimate Sale transaction of appellant with M/s Shri Ratnraj Gems Pvt. Ltd., Suryakoti Trading