“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

Shri Prince Kumar, Amritsar vs. Income Tax Officer Ward-2(1), Amritsar

In the result, both the appeals filed by the assessee are allowed for statistical

ITA 508/ASR/2024[2018-19]Status: DisposedITAT Amritsar21 Apr 2025AY 2018-19

Bench: Sh. Udayan Dasgupta & Sh. Krinwant Sahay

For Appellant: Sh. P. N. Arora, Adv

Section 144Section 250Section 69C

this matter and is deliberately prolonging the proceedings. Thus, the impugned Gold stock amounting to Rs. 47,98,000/- has been rightly added as unexplained expenditure under section 69C of the Income Tax Act, 1961 and taxed accordingly alongwith the interest due. Subject to the above discussion, the appeal

Marie Products Private Limited, Jaipur vs. Assistant Commissioner of Income Tax, Circle 7, Jaipur

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

ITA 771/JPR/2023[2018-19]Status: DisposedITAT Jaipur21 Apr 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. P. C. Parwal, CAFor Respondent: Sh. Ajay Malik, CIT

Section 14Section 142(1)Section 143(3)

considered as afterthoughts and not tenable. Therefore, a sum of Rs. 1,45,81,700/- being the amount of excess stock considered as unexplained expenditure as per provision of section 69C of the Act. 2.4 During that proceeding statements of various persons were recorded u/s. 14 of the Central Excise ... considering the detailed submission filed and without issuing a show cause notice added the above amount to the total income of the Assessee as unexplained expenditure under section 69C of the Act. The CIT(A) at para 7.10 of the order held that the Appellant was unable to reconcile

International Customer Related Management Services Pvt Ltd, Chandigarh vs. Income Tax Officer, Ward-6(1), Mohali

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

ITA 557/CHANDI/2024[2012-13]Status: DisposedITAT Chandigarh21 Apr 2025AY 2012-13

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Parikshit Aggarwal, C.A (Virtual)For Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR

Section 143(2)Section 144Section 147Section 148Section 69C

confirming the addition of Rs. 56,18,640/- made by Ld. AO u/s 69C by erroneously holding the interest paid on bank loan as unexplained expenditure. 2 5. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the addition ... added by treating rental receipts as undisclosed income; a disallowance of interest amounting to Rs. 56,18,640/- was made, which was treated as unexplained expenditure under Section 69C; and a sum of Rs. 17,192/- was added on account of interest income being treated as undisclosed

TDS Management Consultants P.Ltd., Mohali vs. Pr.CIT-1, Chandigarh

The appeal stand allowed in terms of our above order

ITA 62/CHANDI/2021[2016-17]Status: DisposedITAT Chandigarh21 Apr 2025AY 2016-17

Bench: Hon’Ble Shri Rajpal Yadav & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No.62/Chandi/2021 (िनधा"रणवष" / Assessment Year: 2016-17) Tds Management Consultant Pvt. Ltd. Pr. Cit E-193, Phase 8-B, Mohali, Aaykar Bhawan, बनाम/ Vs. Punjab - 160071 Sector 17, Chandigarh-1. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aacct-5653-K (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Sh. Parikshit Aggarwal, (Ca) & Ms. Shruti Khandelwal(Adv) – Ld. Ars ""थ"कीओरसे/Respondent By : Smt. Kusum Bansal(Cit)– Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 26-03-2025 घोषणाकीतारीख /Date Of Pronouncement : 21-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. By Way Of This Appeal, The Assessee Assails Invocation Of Revisionary Jurisdiction U/S 263 By Ld. Pr. Commissioner Of Income Tax, Chandigarh-1 (Pr.Cit) For Assessment Year (Ay) 2016-17 In The Matter Of An Assessment Framed By Ld. Ao U/S 143(3) Of The Act On 22-12- 2018. The Ld. Ar Advanced Arguments With The Help Of Various Documents As Placed On Record. The Ld. Cit-Dr Justified Impugned Revision Of The Assessment Order.

For Appellant: Sh. Parikshit Aggarwal, (CA) and Ms. Shruti Khandelwal(Adv) – Ld. ARsFor Respondent: Smt. Kusum Bansal(CIT)– Ld. DR

Section 142(1)Section 143(3)Section 14ASection 194JSection 263

consultancy fees whereas as reported by Tax Auditor, the assessee deducted TDS u/s 194J on professional payments of Rs.64.30Lacs. The differential payment was, therefore, unexplained expenditure for the assessee. Since the assessee failed to make any substantial representation, the assessment order was cancelled and Ld. AO was directed to pass ... Aggrieved, the assessee is in further appeal before us. 4. From the revision order, it is crystal clear that the allegation of unexplained expenditure has been made on the ground that the assessee claimed professional expenditure which was much less than the figures as reported by Tax Auditor u/s 194J

Sen Ferro Alloys (P) Ltd., Kolkata vs. A.C.I.T., CC - 4(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 2376/KOL/2024[2021-2022]Status: DisposedITAT Kolkata21 Apr 2025AY 2021-2022

Bench: SHRI RAJESH KUMAR (Accountant Member)

For Appellant: Shri Somnath GhoshFor Respondent: Ms. MadhumitaDas, Addl.CIT

Section 132Section 142(1)Section 143(3)Section 69C

purported addition of Rs. 30,00,000/- made the Ld Assistant Commissioner of Income Tax, Central Circle 4(3). Kolkata on the allegation of unexplained expenditure within the prescription contained u/s. 69C of the Act and the adverse conclusion reached on that behalf in violation of the statutory prescription ... duly replied by the assessee, however, the AO rejected the contention of the assessee and treated the payments made to M/s Majee Group as unexplained expenditure u/s.69C of the Act and added the same to the total income of the assessee. 4. In the appellate proceedings

Naimishbhai Kantibhai Patel, Ahmedabad vs. The ITO, Ward-1(3)(1), Ahmedabad

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

ITA 89/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad17 Apr 2025AY 2016-17

Bench: Dr.Brr Kumar & Ms Suchitra Kamble

For Appellant: Shri Hersh Jani, ARFor Respondent: Adjournment Application filed

Section 144BSection 147Section 271(1)(c)Section 69C

26/03/2022. In the said order Rs. 64,46,202/- has been added to the assessee's income u/s 69C of the Act as unexplained expenditure. Simultaneously a penalty proceedings u/s 271(1)(c) were also initiated and an order imposing penalty was passed on 27.09.2022 by the Assessing Officer

Jayeshkumar Dahyabhai Mali, Ahmedabad vs. Income Tax Officer - Ward 6(1)(1) Ahmedabad, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1911/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad17 Apr 2025AY 2018-19

Bench: Dr. Brr Kumar & Ms. Suchitra Kamble

For Appellant: Shri Prashant Shrivastav, A.RFor Respondent: Shri Pratik Sharma, Sr. DR

Section 147Section 69C

income at Rs. 12,94,765/- whereby an addition of Rs. 4,94,925/- made under Section 69C of the Act on account of unexplained expenditure. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee ... Therefore, the CIT(A) has not taken cognizance of these documents and confirmed the addition under Section 69C of the Act on account of unexplained expenditure. But the assessee had demonstrated through its documentary evidences that the said expenditure was incurred during the business transaction and therefore

Bses Rajdhani Power Ltd., New Delhi vs. ACIT, Cicle- 5(1), New Delhi

ITA 4850/DEL/2017[2007-08]Status: DisposedITAT Delhi16 Apr 2025AY 2007-08

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwal

Section 132Section 143(1)Section 143(2)Section 148

interest paid to them be not disallowed being bogus. The AO further asked as to why not commission @ 0.25% be added as unexplained expenditure paid to obtain such accommodation entries. The AO also issued summons u/s 133(6) of the Act to these five companies from whom the loans were ... treating the same as bogus expenditure. The AO further made an addition of INR 2,66,000/- by holding the same as unexplained expenditure u/s 69C of the Act by alleging that the same was paid as commission @ 0.25% to obtain the bogus accommodation ITA Nos. 4850/Del/2024 & C.O.Nos.14 & 20/Del/2025

ACIT, Central Circle, Kota vs. Ajay Bakliwal, Kota

In the result, the appeal filed by the revenue stands dismissed in

ITA 1413/JPR/2024[2018-19]Status: DisposedITAT Jaipur11 Apr 2025AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM आयकर अपील सं. / ITA No. 1413/JP/2024 निर्धारण वर्ष / Assessment Year : 2018-19 ACIT, Central Circle, Kota बनाम Vs. Ajay Bakliwal C 6 Vallabh Bari, Vallabh Bari, Kota स्थायी लेखा सं. / जीआईआर सं./PAN/GIR No.: ABZPB 7775 P अपीलार्थी / Appellant प्रत्यर्थी / Respondent निर्धारिती की ओर से / Assessee by : Sh. Rajendra Sisodia, Adv. राजस्व की ओर से / Revenue by : Mrs. Anita Rinesh, JCIT-DR सुनवाई की तारीख / Date of Hearin

For Appellant: Sh. Rajendra Sisodia, AdvFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 132(1)Section 132(4)Section 143(3)

deleted. This ground of appeal is treated as allowed. 9 ACIT v. Ajay Bakliwal The addition of Rs. 49,85,873/- on account of unexplained expenditure u/s 69C of the Act. 7.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings ... verifiable/accounted. Hence, the expense made in cash at Rs. 49,85,873/- is added to the total income of the assessee treated as unexplained expenditure u/s 69C and taxed as per provisions of section 115BBE of the IT Act. In the appellate proceedings, the assessee furnished copy of the letter

Neeraj Singhal, Dehradun vs. DCIT ACIT Cen Cir, Ddn, Dehradun

In the result, the appeal of the assessee is allowed

ITA 124/DDN/2024[2021-22]Status: DisposedITAT Dehradun09 Apr 2025AY 2021-22

Bench: Shri Satbeer Singh Godara & Shri M. Balaganesh(Through Video Conferencing) Neeraj Singhal, Vs. Dcit/Acit, Haripur, Kalsi, Dehradun, Central Circle, Uttarakhand Dehradun (Appellant) (Respondent) Pan: Apzps7059D Assessee By : Shri Harshit Gupta, Ca Revenue By: Shri S. K. Chaterjee, Cit Dr Date Of Hearing 19/03/2025 Date Of Pronouncement 09/04/2025

For Appellant: Shri Harshit Gupta, CAFor Respondent: Shri S. K. Chaterjee, CIT DR

Section 132Section 139(1)Section 143(3)Section 292CSection 40A(3)Section 69Section 69C

mention the appellant's name nor the business, and the amounts listed were never treated as expenditures by the appellant. Treating these amounts as unexplained expenditure under Section 69C is inappropriate because it disregards the inherent requirement of this section, which mandates that the "assessee must have incurred that expenditure ... source of the said cash expenditure of Rs. 5 lakhs was not given by the assessee, the ld AO added the same as unexplained expenditure in terms of section 69C of the Act. This action of the ld AO was upheld by the ld CIT(A). 5. We find that

Shree Balaji Associates Pune LLP, Pune vs. PCIT(Central), Pune

ITA 1008/PUN/2024[AY 2019 - 20]Status: DisposedITAT Pune09 Apr 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Krishna GujarathiFor Respondent: Shri Amol Khairnar, CIT-DR

Section 132Section 153ASection 263Section 263(1)Section 43C

assessee at Rs.1,58,11,895/- by making addition of Rs.65,415/- u/s 69C r.w.s 115BBE of the Act on account of unexplained expenditure. 13. Subsequently, the Ld. PCIT on examination of the record noted that the assessee has declared net profit of Rs.2,10,15,755/- during the course

Shree Balaji Associates Pune LLP, Pune vs. PCIT(Central), Pune

ITA 1007/PUN/2024[AY 2018 - 19]Status: DisposedITAT Pune09 Apr 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

Section 132Section 153ASection 263Section 263(1)Section 43C

Anurag Enterprises, Mumbai vs. ITO, Ward 19(1)(1), Mumbai

ITA 6791/MUM/2024[2017-18]Status: DisposedITAT Mumbai08 Apr 2025AY 2017-18

Bench: Shri Narender Kumar Choudhry (Jm) & Shri Omkareshwar Chidara (Am) Anurag Enterprises Ito Ward 19(1)(1) Je 4200, Bharat Diamond Room No. 223 Bourse, Bandra Kurla Vs. 2Nd Floor, Matru Complex, Bandra East Mandir, Tardeo Road Mumbai-400 051. Mumbai-400007. Pan : Aaafa3005B Appellant Respondent

For Appellant: Shri Rakeshkumar SirsalewalaFor Respondent: Shri Manoj Kumar Sinha

Section 69C

firm which deals in trading in diamonds filed an appeal before the ITAT with the following grounds of appeal :- “Ground No. 1 - Addition for unexplained expenditure u/s 69C of the Income tax Act, 1961 as bogus purchases On the facts and in the circumstances of the case ... learned Assessing Officer disallowed alleged bogus purchases of Rs. 4,53,0007-and added the same to the income of the Appellant as unexplained expenditure under Section 69C of the Income-tax Act. 1961, which was later upheld by Commissioner of Income Tax (Appeals).The appellant therefore prays that

Vimal Kumar Mantri HUF Through Karta Shri Amit Kumar Mantri, Jaipur vs. Income Tax Officer Ward - 4(3), Jaipur

Appeal is hereby dismissed as having been withdrawn

ITA 29/JPR/2024[2014-15]Status: DisposedITAT Jaipur07 Apr 2025AY 2014-15

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri Tarun Mittal, C.AFor Respondent: Mrs. Anita Rinesh, JCIT-DR

Section 147Section 250Section 68Section 69C

transactions of purchase/sale of shares, leading to long term capital gains, to the tune of Rs. 68,48,094/-, and also to the unexplained expenditure to the tune of Rs. 4,41,888/- found to have been paid by the assessee by way of commission @ 6% of the sale value

Subhash Chander Gupta, H.No. 16528 Vishnu Colony, Raliway Road, Kurukshetra, Haryana vs. Joint Commissioner of Income Tax, Kurukshetra

In the result, both appeals of the assessee are

ITA 768/CHANDI/2024[2011-2012]Status: DisposedITAT Chandigarh07 Apr 2025AY 2011-2012

Bench: Shri Rajpal Yadav & Shri Krinwant Sahay

For Appellant: Shri Sudhir Sehgal, Advocate and Shri Abhinav Gupta, AdvocateFor Respondent: Smt. Kusum Bansal, CIT, DR

Section 143(2)Section 148Section 153C

examined what is the source of funds of Rs.13 Crores in the hands of Shri Sanjay Bansal. No addition on account of unexplained expenditure was made in the hands of Shri Sanjay Bansal. 15.2 In support of his contention, ld. Counsel for the assessee relied upon following judgements whose copies

Subhash Chander Gupta, H.No. 1652 8 Vishnu Colony, Railway Road, Kurukshetra, Haryana vs. ITO Ward-3, Kurukshetra, Haryana

In the result, both appeals of the assessee are

ITA 765/CHANDI/2024[2011-2012]Status: DisposedITAT Chandigarh07 Apr 2025AY 2011-2012

Bench: Shri Rajpal Yadav & Shri Krinwant Sahay

For Appellant: Shri Sudhir Sehgal, Advocate and Shri Abhinav Gupta, AdvocateFor Respondent: Smt. Kusum Bansal, CIT, DR

Section 143(2)Section 148Section 153C

Sahifa Asif Shaikh, Mumbai vs. ITO - Ward 31(1)(1), Mumbai

ITA 1116/MUM/2025[2012-13]Status: DisposedITAT Mumbai07 Apr 2025AY 2012-13

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Ms. Ridhisha JainFor Respondent: Shri Gotimukul Santosh Kumar

Section 10(38)Section 131Section 143(3)Section 144Section 147Section 234ASection 250Section 271(1)(c)Section 69

made by the Ld AO of Rs.73,225/-on account of hypothetical commission paid on sale of shares of M/s PFL Infotech Ltd as unexplained expenditure u/s 69 of the IT act 1961 and the reasons assigned for doing so are wrong and contrary to the Provisions of Income

ITO Ward 4(1)(1), Mumbai vs. Fairdeal Infin Services Private Limited, Mumbai

Appeal of the Revenue is dismissed

ITA 5833/MUM/2024[2015-16]Status: DisposedITAT Mumbai07 Apr 2025AY 2015-16

Bench: Shri Narender Kumar Choudhry

For Respondent: Ms. Kavitha Kaushik (Sr. DR)

Section 143(3)Section 69C

ground the appellant has challenged the addition made of Rs.69,870/- being 3 percent of the entire sale proceeds of alleged penny stocks as unexplained expenditure u/s 69C of the Act. 6.2 This ground of appeal is consequential to grounds of appeal number 1. As the disallowance made on account

ACIT CC -6(1), Mumbai, Bkc vs. Rucha Consultancy LLP, Pune

In the result, the appeal filed by the assessee is allowed and the appeal of the Revenue is dismissed

ITA 5706/MUM/2024[2021-22]Status: DisposedITAT Mumbai07 Apr 2025AY 2021-22

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Nishit GandhiFor Respondent: Smt. Sanyogita Nagpal, CIT-DR

Section 132Section 139(4)Section 143(2)Section 148Section 65BSection 69A

alleged receipt of Rs.2.10 crores as income u/s 69A of the Act as unexplained money. The alleged payment of Rs.1.99 crores was assessed as unexplained expenditure u/s 69C of the Act. 6.4. In the appellate proceedings, the Ld CIT(A) confirmed the addition of Rs.2.10 crores. In respect of Rs.1.99 ... revenue, the relief granted in respect of addition of Rs.1.99 crores is being challenged. The AO added the above said amount as unexplained expenditure u/s 69C of the Act. The Ld CIT(A) noticed that the alleged disbursements noticed in the whatsapp image was out of the alleged receipt

Rucha Consultancy LLP, Pune vs. DCIT CC 6(1), Mumbai

In the result, the appeal filed by the assessee is allowed and the appeal of the Revenue is dismissed

ITA 4996/MUM/2024[2021-2022]Status: DisposedITAT Mumbai07 Apr 2025AY 2021-2022

Bench: Shri B.R. Baskaran & Shri Anikesh Banerjee

For Appellant: Shri Nishit GandhiFor Respondent: Smt. Sanyogita Nagpal, CIT-DR

Section 132Section 139(4)Section 143(2)Section 148Section 65BSection 69A