“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

Deputy Commissioner of Income-Tax, Central Circle-3, Jaipur vs. Sapna Karnani, Tonk Phatak

In the result, the appeals of the revenue in ITA No

ITA 712/JPR/2025[2017-18]Status: DisposedITAT Jaipur14 Oct 2025AY 2017-18

For Appellant: Shri Deepak Sharma, CAFor Respondent: Ms. Alka Gautam, CIT, DR

Section 127Section 139(1)Section 153ASection 153CSection 68Section 69C

case, the Id. CIT(A) is justified in deleting the addition of Rs.1,96,250/- made by the AO u/s 69C on account of unexplained expenditure i.e. commission expenses incurred for acquiring accommodation entry. Ground 3. Whether on the facts and in the circumstances of the case

Deputy Commissioner of Income-Tax, Central Circle-3, Jaipur vs. Sapna Karnani, Tonk Phatak

ITA 711/JPR/2025[2016-17]Status: DisposedITAT Jaipur14 Oct 2025AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Shri Deepak Sharma, CAFor Respondent: Ms. Alka Gautam, CIT, DR

Section 127Section 139(1)Section 153ASection 153CSection 68Section 69C

justified in deleting the addition of Rs. 1,96,250/-made by the AO u/s 69C on account of unexplained expenditure i.e. commission expenses incurred for acquiring accommodation entry. Ground 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in deleting

Deputy Commissioner of Income-Tax, Central Circle-3, Jaipur vs. Sapna Karnani, Tonk Phatak

In the result, the appeals of the revenue in ITA No

ITA 710/JPR/2025[2014-15]Status: DisposedITAT Jaipur14 Oct 2025AY 2014-15

For Appellant: Shri Deepak Sharma, CAFor Respondent: Ms. Alka Gautam, CIT, DR

Section 127Section 139(1)Section 153ASection 153CSection 68Section 69C

case, the Id. CIT(A) is justified in deleting the addition of Rs.1,96,250/-made by the AO u/s 69C on account of unexplained expenditure i.e. commission expenses incurred for acquiring accommodation entry. Ground 3. Whether on the facts and in the circumstances of the case

Deputy Commissioner of Income-Tax, Central Circle-3, Jaipur vs. Sapna Karnani, Tonk Phatak

In the result, the appeals of the revenue in ITA No

ITA 709/JPR/2025[2013-14]Status: DisposedITAT Jaipur14 Oct 2025AY 2013-14

For Appellant: Shri Deepak Sharma, CAFor Respondent: Ms. Alka Gautam, CIT, DR

Section 127Section 139(1)Section 153ASection 153CSection 68Section 69C

case, the Id. CIT(A) is justified in deleting the addition of Rs.1,96,250/-made by the AO u/s 69C on account of unexplained expenditure i.e. commission expenses incurred for acquiring accommodation entry. Ground 3. Whether on the facts and in the circumstances of the case

Sunil Kumar Agarwal, Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-2, Jaipur

ITA 521/JPR/2025[2020-21]Status: DisposedITAT Jaipur14 Oct 2025AY 2020-21

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, \nvk;dj vihy la-@ITA Nos.513 & 519 to 521/JP/2025\nfu/k Zkj.k o\"kZ@Assessment Years : 2016-17 & 2018-19 to 2020-21\n\nSunil Kumar Agarwal\n395, Narnoli Mansion, Outside\nSanganeri Gate, Jaipur\ncuke\nVs.\nACIT,\nCentral Circle-2,\nJaipur\nLFkk;h y s[kk l a-@thvkb Zvkj la-@PAN/GIR No.: ABRPA9601M\nvihykFkhZ@Appellant i zR;Fkh Z@Respondent\n\nvk;dj vihy la-@ITSS No. 03/JP/2025\nfu/k Zkj.k o\"kZ@Assessment Year : 2015-16\

For Appellant: Shri S. L. Poddar, AdvFor Respondent: Mrs. Anita Rinesh, JCIT, Sr-DR

Section 132Section 139Section 153ASection 234B

made above, it is submitted that the ld.AO has earned in making additions on the one hand by treating income on account of various unexplained expenditure and on the other hand on account of income by way rate application on unaccounted sales. The addition is two-fold, first

Sunil Kumar Agarwal, Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-2, Jaipur

In the result the appeal of the assessee in ITA no

ITA 519/JPR/2025[2018-19]Status: DisposedITAT Jaipur14 Oct 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, \nvk;dj vihy la-@ITA Nos.513 & 519 to 521/JP/2025 \nfu/k Zkj.k o"kZ@Assessment Years : 2016-17 & 2018-19 to 2020-21\n\nSunil Kumar Agarwal \n395, Narnoli Mansion, Outside \nSanganeri Gate, Jaipur \ncuke \nVs. \nACIT, \nCentral Circle-2, \nJaipur \nLFkk;h y s[kk la-@thvk Zvkj la-@PAN/GIR No.: ABRPA9601M \nvihykFkhZ@Appellant \ni zR;Fkh Z@Respondent\n\n\nvk;dj vihy la-@ITSS No. 03/JP/2025 \nfu/kZkj.k o"kZ@Assessment Year

For Appellant: Shri S. L. Poddar, AdvFor Respondent: Mrs. Anita Rinesh, JCIT, Sr-DR

Section 132Section 139Section 153ASection 234B

order. The appellant has contended that the Id.AO has earned in making additions on the one hand by treating income on account of various unexplained expenditure and on the other hand on account of income by way rate application on unaccounted sales, and that the addition is two-fold, first

Sunil Kumar Agarwal, Jaipur vs. ACIT, Cen. Cir-2, Jaipur

In the result the appeal of the assessee in ITA no

ITA 513/JPR/2025[2016-17]Status: DisposedITAT Jaipur14 Oct 2025AY 2016-17

For Appellant: Shri S. L. Poddar, AdvFor Respondent: Mrs. Anita Rinesh, JCIT, Sr-DR

Section 132Section 139Section 153ASection 234B

Blufab Fashion Fabrics LLP, Andheri Kurla Road vs. DCIT CC 2(2), Pratishtha Bhavan

In the result, both appeals are allowed for statisti

ITA 4367/MUM/2025[19-20]Status: DisposedITAT Mumbai14 Oct 2025

Bench: Shri Om Prakash Kant () & Shri Narender Kumar Choudhry ()

For Respondent: Mr. Dharmesh Shah &

Section 143(3)Section 250Section 69BSection 69C

regarding additions made made made on on on account account account unexplained unexplained unexplained money money money and and and unexplained unexplained unexplained expenditure Considering the above facts, I decide the appeal on expenditure Considering the above facts, I decide the appeal on expenditure Considering the above facts, I decide ... erred in making addition of Rs.3,82,099/ urged that the AO has erred in making addition of Rs.3,82,099/- u/s.69C as unexplained expenditure. u/s.69C as unexplained expenditure. 12.3.11 have carefully considered the facts mentioned by the AO, 12.3.11 have carefully considered the facts mentioned

Blufab Fashion Fabrics LLP, Andheri (East) vs. DCIT CC 2(2), Pratistha Bhavan

In the result, both appeals are allowed for statisti

ITA 4366/MUM/2025[18-19]Status: DisposedITAT Mumbai14 Oct 2025

Bench: Shri Om Prakash Kant () & Shri Narender Kumar Choudhry ()

For Respondent: Mr. Dharmesh Shah &

Section 143(3)Section 250Section 69BSection 69C

Ruby Rajendra P Tiwari, Mumbai vs. ITO Ward 42(3)(2), Mumbai

Appeal is treated as allowed for statistical purposes

ITA 3546/MUM/2025[2016-17]Status: DisposedITAT Mumbai14 Oct 2025AY 2016-17

Bench: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Sanjay ChaudharyFor Respondent: Shri Annavaran Kosuri

Section 144Section 144BSection 147Section 192Section 45Section 69ASection 69C

Ruby Tiwari. 4. The Learned Assessing Officer has erred in law and facts making addition of Rs.3,72,455 under sec 69C as unexplained Expenditure. Rs.372455 payment made to credit card through the bank account out of taxable income earned by the Appellant. 5. The Ld. A.O. has erred ... Capital Gain on sale of the property u/s.45 67,00,000/- 05 Un-reported salary u/s.192 8,28,410 06 Credit card payment unexplained expenditure u/s.69C 3,72,455/- 4. Being aggrieved, Assessee preferred appeal before the Ld. CIT(A) which was dismissed vide order, dated 28/03/2025, as being barred

Income Tax Officer, C R Building Delhi vs. Virat Promoters Private Limited, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 5746/DEL/2024[2013-14]Status: DisposedITAT Delhi14 Oct 2025AY 2013-14

Bench: SHRI PRAKASH CHAND YADAV (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 147Section 148Section 148ASection 250Section 69ASection 69C

Rs.1,21,68,000/- was made in the hands of the assessee by treating the payment made for acquisition of immovable property as unexplained expenditure u/s 69A. Further addition of Rs. 3,16,28,603/- is made by holding the same as unexplained expenditure u/s 69C of the Act. Against ... Commissioner of Income tax (A), NFAC has erred in deleting the addition of Rs.1,21,68,000/- made on account of unexplained expenditure u/s 69A of the Income Tax Act, 1961. II. Whether on the facts of the case and in law, the Ld. CIT (A) has erred in deleting

Income Tax Officer, Ward-5(1)(2), Noida vs. Bhavya Pipe Industry, Greater Noida

In the result, the appeal of the Revenue and Cross Objection of the assessee are dismissed

ITA 5107/DEL/2024[2022-23]Status: DisposedITAT Delhi14 Oct 2025AY 2022-23

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwalincome Tax Officer, Bhavya Pipe Industry Ward-5(1)(2), Plot No. F-39, Site- C, Noida. Vs. Upsidc, Industrial Area, Surajpur ,Gautam Buddha Nagar, Gr. Noida-201306 Uttar Pradesh. Pan-Aatfb2209D (Appellant) (Respondent)

Section 136(6)Section 143(3)Section 69C

sale. But the question arises regarding income which is embedded in such bogus purchases or alterriatively what percentage of purchases can be treated as unexplained expenditure, this involves guess work. The correct approach in such case is to estimate suppressed. profit element embedded in the amount of such bogus purchases

Sriram Enterprises, Bhagalpur vs. Asst Commissioner of Income Tax Central Circle 1, Patna

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

ITA 607/PAT/2024[2021-2022]Status: DisposedITAT Patna13 Oct 2025AY 2021-2022

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(2)Section 143(3)Section 250

were not responded by the parties and the amounts were in relation to the services and goods purchased and the same were treated as unexplained expenditure. The Ld. AR submitted that two of the creditors were regular creditors from whom TDS was duly deducted and merely because the notices

Ms. Nabeel Constructions Pvt. Ltd, Mira Road, Thane vs. Pr. CIT Thane -1, Thane

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

ITA 4340/MUM/2025[2021-22]Status: DisposedITAT Mumbai13 Oct 2025AY 2021-22

Section 115BSection 133(6)Section 263Section 271ASection 37(1)Section 69C

jurisdictional and substantive grounds, contending that the learned PCIT erred in directing the Assessing Officer to re-characterise the disallowance of purchases as unexplained expenditure under section 69C read with section 115BBE and to correspondingly initiate penalty under section 271AAC in respect ... that even if some purchases were held to be non-genuine, the disallowance represented a business disallowance under section 37(1) and not an unexplained expenditure under section 69C because the source of such expenditure was already on record being the very trading account forming part of the books

Balajee Infratech & Constructions Private Limited, Mumbai vs. DCIT Circle 4(1)(1), Mumbai

In the result, the appeal of the assessee stands allowed

ITA 2261/MUM/2025[2012-13]Status: DisposedITAT Mumbai13 Oct 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 133(6)Section 133ASection 143(3)Section 147Section 37(1)

erroneously invoked section 69C, whereas the appropriate provision was section 37(1), since the issue pertained to allowability of business expenditure and not to unexplained expenditure. The learned CIT(A) thus upheld the addition on the ground that the transaction itself was not legally valid, and consequently, the expenditure could

Devang Bhupendra Shah, Mumbai vs. Income Tax Officer 32(1)(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4218/MUM/2023[2014-15]Status: DisposedITAT Mumbai13 Oct 2025AY 2014-15

Bench: Shri Sandeep Gosain & Shri Prabhash Shankardevang Bhupendra Shah, V/S. Income Tax Officer, Ward – B/9, Neminath Apt., बनाम 32(1)(4), Kautilya Bhavan, Shimpoli Road, Borivali Bandra Kurla Complex, West, Mumbai – 400 092, Bandra (East), Mumbai– Maharashtra 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aadps1211L Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Rahul Kapadia,ARFor Respondent: Shri Annavaran Kasuri, (Sr. AR)

Section 10(38)Section 143(3)Section 68Section 69C

circumstances of the case, the Ld.CIT(A) is not justified in confirming additions of Rs. 11,30,109 u/s 69C of the Act, being unexplained expenditure, made by the Ld. Assessing Officer, without any base and evidence and based on surmises and conjuctures. 10. Under the facts and circumstances

Rupali Gupta, Meerut vs. National Faceless Appeal Centre (NFAC), National Faceless Appeal Centre Delhi

Appeal is dismissed

ITA 5182/DEL/2024[2014-15]Status: DisposedITAT Delhi13 Oct 2025AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalassessment Year: 2014-15 Vs. National Rupali Gupta, Faceless Appeal 273, Budhana Gate, Meerut, Centre, Delhi Uttar Pradesh Pan: Ajcpg6194L (Appellant) (Respondent) Assessee By None Department By Sh. Rajesh Kumar Dhanesta, Sr. Dr Date Of Hearing 13.10.2025 Date Of Pronouncement 13.10.2025 Order Per Satbeer Singh Godara, Jm This Assessee’S Appeal For Assessment Year 2014-15, Arises Against The Commissioner Of Income Tax (Appeals)/National Faceless Appeal Centre [In Short, The “Cit(A)/Nfac”], Delhi’S Din & Order No. Itba/Nfac/S/250/2024-25/1068639287(1), Dated 12.09.2024 Involving Proceedings Under Section 147 R.W.S. 144 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’). Case Called Twice. None Appears At The Assessee’S Behest. She Had Also Not Put In Appearance On All The Earlier Five Opportunities Of Hearing As Well. The Assessee Is Accordingly Proceeded Ex-Parte. 2. It Next Transpires With The Able Assistance Coming From The Revenue Side That Both The Learned Lower Authorities Have Inter Alia Treated The Assessee’S Alleged Capital Gains Derived From Sale Of Shares Amounting To Rs.48,28,090/- As Bogus Followed By 5% Commission Expenditure Thereupon Coming To Rs.2,41,405/- As Unexplained Under Section 69C; Respectively, In Assessment Order Dated 28Th March, 2022 & Upheld In The Lower Appellate Discussion, As Followed: “4. The Present Appeal Was Filed By The Appellant On 21.04.2022 By Raising 20 Grounds Of Appeal. During The Course Of Appeal Proceedings, Hearing Notices Were Sent On 15.07.2024, 01.08.2024 & 20.08.2024. In Response To The Notices Issued The Appellant Filed Only A Brief Written Submission As Under:

Section 147Section 68Section 69C

money for facilitating such transactions. The payment made to such commission agents was separately added for a sum of Rs.2,41 ,405/- as unexplained expenditure by invoking section 69C of the IT Act. The assessment order is speaking and the AO has brought sufficient material evidences to establish that

Arpita Mathew Arukakkal, Nagpur vs. ITO Ward 5(3), Nagpur

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

ITA 501/NAG/2025[2016-17]Status: DisposedITAT Nagpur10 Oct 2025AY 2016-17

Bench: Shri Pavan Kumar Gadalearpita Mathew Arukakkal, Residency Road, Sadar Nagpur- 440001, ……………. Appellant Maharashtra. Pan – Arkpm3965D V/S Income Tax Officer ……………. Respondent Ward–5(3), Nagpur, Maharashtra. Assessee By:Shri.Sapan Usrethe.A.R. Revenue By :Shri.Surjit Kumar Saha.Sr.Dr

For Appellant: Shri.Sapan Usrethe.A.RFor Respondent: Shri.Surjit Kumar Saha.Sr.DR

Section 144Section 144BSection 148Section 151(1)

addition pertain to the bank account of the society which is separate entity and only on presumption, it has been taxed as unexplained expenditure in the hands of the appellant. 10. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing ... Arpita Mathew Arukakkal opening balance and credits from all the three bank accounts dealt at Page 9 of the order as unexplained expenditure u/sec 69C of the Act and assessed the total income of Rs.23,30,338/– and passed the order u/sec147r.w.s. 144 r.w.s144B of the Act dated 05/03/2024

Sana Md.Saqib Puthawala, Ahmedabad vs. The ITO, Ward-1(1)(1), Ahmedabad

In the result, the appeal of the Assessee is allowed

ITA 624/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad10 Oct 2025AY 2018-19

Bench: Shri Siddhartha Nautiyal (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

Section 10(38)Section 147Section 148Section 148ASection 250Section 69C

sale of shares of Kushal Ltd treating as bogus and thereby making addition to that extent as well as unexplained expenditure of Rs. 1,41,575/- u/s 69C by way of commission at 6% on its purchase value made by A.O. is wholly illegal, unlawful and against the principles ... appellant. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding that the appellant had incurred unexplained expenditure by way of commission at 6% of the purchase value of shares of Kushal Ltd. and thereby confirming the addition

Telangana State Board of Intermediate Education, Hyderabad vs. ITO., Exemption Ward-1(3), Hyderabad

ITA 826/HYD/2025[2018-19]Status: HeardITAT Hyderabad10 Oct 2025AY 2018-19

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, Darshan JakhariaFor Respondent: Sri Gurpreet Singh, Sr. AR

Section 101Section 142(1)Section 148Section 148A

income at Rs.5,18,78,078/- by making additions under the Head "Income from Other sources" amounting to Rs.5,18,00,478/- and unexplained expenditure amounting to Rs.77,600/- vide order dated 28.03.2023 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961 [in short