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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

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

ITA 1702/PUN/2024[2019-20]Status: DisposedITAT Pune09 Jan 2025AY 2019-20

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And
Section 131Section 132Section 139Section 143(2)Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE "A" BENCH : PUNE BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND MS. ASTHA

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

ITA 1701/PUN/2024[2018-19]Status: DisposedITAT Pune09 Jan 2025AY 2018-19

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

Section 131Section 132Section 139Section 143(2)Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE "A" BENCH : PUNE BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND MS. ASTHA

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

In the result, all the eight appeals filed by the assessee are partly allowed and the only appeal filed by the Revenue is dismissed

ITA 1700/PUN/2024[2017-18]Status: DisposedITAT Pune09 Jan 2025AY 2017-18

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And Shri Ramnath P Murkunde
Section 131Section 132Section 139Section 143(2)Section 153A

circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.49,41,000/ on account of unexplained expenditure without appreciating the fact that the assessee has failed to prove the nature of transactions recorded in the seized material and the redrafted cash flow ... that the Assessing Officer made addition of Rs.4,56,38,000/- being unaccounted cash receipts and also made addition of Rs.49,41,000/- as unexplained expenditure u/s 69C. In appeal, the Ld. CIT(A) restricted such undisclosed cash receipts to 85% of the cash receipts. He however, deleted the addition

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

In the result, all the eight appeals filed by the assessee are partly allowed and the only appeal filed by the Revenue is dismissed

ITA 1699/PUN/2024[2016-17]Status: DisposedITAT Pune09 Jan 2025AY 2016-17

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And Shri Ramnath P Murkunde
Section 131Section 132Section 139Section 143(2)Section 153A

circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.49,41,000/ on account of unexplained expenditure without appreciating the fact that the assessee has failed to prove the nature of transactions recorded in the seized material and the redrafted cash flow ... that the Assessing Officer made addition of Rs.4,56,38,000/- being unaccounted cash receipts and also made addition of Rs.49,41,000/- as unexplained expenditure u/s 69C. In appeal, the Ld. CIT(A) restricted such undisclosed cash receipts to 85% of the cash receipts. He however, deleted the addition

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

In the result, all the eight appeals filed by the assessee are partly allowed and the only appeal filed by the Revenue is dismissed

ITA 1698/PUN/2024[2015-16]Status: DisposedITAT Pune09 Jan 2025AY 2015-16

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And Shri Ramnath P Murkunde
Section 131Section 132Section 139Section 143(2)Section 153A

circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.49,41,000/ on account of unexplained expenditure without appreciating the fact that the assessee has failed to prove the nature of transactions recorded in the seized material and the redrafted cash flow ... that the Assessing Officer made addition of Rs.4,56,38,000/- being unaccounted cash receipts and also made addition of Rs.49,41,000/- as unexplained expenditure u/s 69C. In appeal, the Ld. CIT(A) restricted such undisclosed cash receipts to 85% of the cash receipts. He however, deleted the addition

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

In the result, all the eight appeals filed by the assessee are partly allowed and the only appeal filed by the Revenue is dismissed

ITA 1697/PUN/2024[2014-15]Status: DisposedITAT Pune09 Jan 2025AY 2014-15

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And Shri Ramnath P Murkunde
Section 131Section 132Section 139Section 143(2)Section 153A

circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.49,41,000/ on account of unexplained expenditure without appreciating the fact that the assessee has failed to prove the nature of transactions recorded in the seized material and the redrafted cash flow ... that the Assessing Officer made addition of Rs.4,56,38,000/- being unaccounted cash receipts and also made addition of Rs.49,41,000/- as unexplained expenditure u/s 69C. In appeal, the Ld. CIT(A) restricted such undisclosed cash receipts to 85% of the cash receipts. He however, deleted the addition

Garware Technical Fibres Limited, Pune vs. DCIT, CC-1(3), Pune

ITA 1696/PUN/2024[2013-14]Status: DisposedITAT Pune09 Jan 2025AY 2013-14

Bench: Shri Rama Kanta Panda & Ms. Astha Chandra

For Appellant: CA Ritu Kamal KishoreFor Respondent: Shri Amol Khairnar, CIT-DR And
Section 131Section 132Section 139Section 143(2)Section 153A

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE "A" BENCH : PUNE BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND MS. ASTHA

Deputy Commissioner of Income-Tax, Central Circle-2, Patna, C.R. Building vs. Deepshree Properties Pvt. Ltd., Saguna Khagaul Danapur Patna

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

ITA 239/PAT/2023[2018-19]Status: DisposedITAT Patna08 Jan 2025AY 2018-19

Bench: SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI SANJAY AWASTHI (Accountant Member)

Section 133ASection 143(2)Section 143(3)Section 153ASection 153CSection 250Section 69ASection 69C

amount pertains to the present assessment year or not at all. 5.2 Regarding the remaining addition of Rs. 37,70,600/- on account of unexplained expenditure it is seen that this addition has been made on the basis of a bunch of loose sheets impounded during the Survey

Ravi Lochan Singh, Patna vs. ACIT, Circle-5, Patna

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

ITA 124/PAT/2020[2011-12]Status: DisposedITAT Patna08 Jan 2025AY 2011-12

Bench: SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI SANJAY AWASTHI (Accountant Member)

Section 250Section 32Section 32(1)

impugned order on each of the issues as under: 3 Ravi Lochan Singh “Ground No 1 regarding disallowed Rs. 1,18,405/- as an unexplained expenditure. On going through the assessment order it is found that the there is negative cash on hand with the appellant, which is a logical ... impossibility in practical. In books of accounts its presence denotes that some expenses have been paid out of the books. So this is unexplained expenditure. No comments on this ground in the AO's remand report. The addition has been made in light of the provisions of the Act relating

Tirupati Minerals and Industries, Nagpur vs. DCIT Or ACIT Deputy Or Assistant Commissioner of Income Tax Center Circle 2(1), Nagpur

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

ITA 195/NAG/2024[AY 2016-17]Status: DisposedITAT Nagpur08 Jan 2025

Bench: Shri V. Durga Rao

For Appellant: Shri Suren DugarkarFor Respondent: Shri Abhay Y. Marathe
Section 133ASection 144Section 147Section 250Section 69C

Rs.5,50,000/- is unjustified, unwarranted and excessive. 3) The Hon'ble CIT (Appeal) ought to have deleted sum of Rs.5,50,000/- being unexplained expenditure to the income of assessee. 2 Tirupati Minerals and Industries 4) The Hon'ble CIT (appeal) did not consider the submissions made ... order under section 147 r/w section 144 of the Act was passed on 24/03/2022, making an addition of ` 5,50,000, on account of unexplained expenditure and same is brought to tax under section 69C of the Act. 4. On appeal, the learned CIT(A) issued several statutory notices

Sirona Dental Systems Private Limited, Mumbai vs. ACIT, Circle 14(1)(2), Mumbai

ITA 4639/MUM/2024[2020-21]Status: DisposedITAT Mumbai08 Jan 2025AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI OMKARESHWAR CHIDARA ( (Accountant Member)

For Appellant: Shri Mandar VaidyaFor Respondent: Shri Leyaqat Ali Aafaqui
Section 10(38)Section 131Section 142(1)Section 143(1)Section 143(3)Section 147Section 68Section 69C

Sources'. Further, the Assessing Officer also made an addition of INR.1,81,146/- under Section 69C of the Act holding the same to be unexplained expenditure incurred by the Assessee for obtaining bogus accommodation entry of Long Term Capital Gains. 4. Being aggrieved, the Assessee preferred appeal before the Learned

Arun Bhardwaj, Delhi vs. ACIT Circle 1, Jaipur

In the result, appeal of the assessee is allowed

ITA 1190/JPR/2024[2010-2011]Status: DisposedITAT Jaipur08 Jan 2025AY 2010-2011

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri S.L. Jain, Advocate &For Respondent: Shri Gautam Singh Choudhary, JCIT
Section 139(1)Section 147Section 148Section 234ASection 250

Arun Bhardwaj, Delhi. 21,65,000/- after making addition of Rs. 11,84,540/- which included unexplained income of Rs. 8,94,545/- and unexplained expenditure of Rs. 2,89,995/-. 5.Being aggrieved by the order of the AO, the assessee preferred appeal before ... partly allowed the appeal of the assessee by deleting the addition of Rs. 2,89,995/- on account of credit card payment as unexplained expenditure. 5. Aggrieved by the order of the ld. CIT (A), the assessee is in appeal before us. Before us, the ld. A/R of the assessee

Sh. Gurmal Singh H No R-18 New Grain Market Near Jain Hospital, Jalandhar Byepass Road, Ludhiana, Punjab vs. The Deputy Commissioner of Income Tax Central Circle-3 Ludhiana, Punjab

Appeal is dismissed

ITA 209/CHANDI/2024[2021-2022]Status: DisposedITAT Chandigarh08 Jan 2025AY 2021-2022

Bench: This Tribunal. The Assessee Is Aggrieved

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Shakti Singh, JCIT, Sr.DR
Section 132(1)Section 142(1)Section 143(2)Section 143(3)Section 253Section 40A(3)Section 69C

account of alleged cash payment of salary and wages. ii) Addition of Rs.36,85,400/- under Section 69C r.w.s. 115BBE on account of alleged unexplained expenditure of the assessee. 12. The assessee being aggrieved by the impugned order which has sustained the above additions of ld. AO has raised following ... order. 2. That the Ld. C!T(A) has erred in confirming the addition of Rs. 36,85,400/-on account of alleged unexplained expenditure of the assessee u/s 69C of the Act on the basis of undated document, having no narration at all. 3. That the sustaining of addition

Badshah Abdul Patel, Aurangabad vs. ITO Ward 1(1) Aurangabad, Aurangabad

In the result, the appeal of the assessee is allowed

ITA 2249/PUN/2024[2018-19]Status: DisposedITAT Pune07 Jan 2025AY 2018-19

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.2249/Pun/2024 Assessment Year : 2018-19 Badshah Abdul Patel, Vs Ito, Ward-1(1), Fulshewra, Aurangabad-423702 Aurangabad Maharashtra Pan : Akapp5853G Appellant Respondent

For Appellant: Shri Kishor B. PhadkeFor Respondent: Shri Vinod Pawar
Section 142(1)Section 143(2)Section 143(3)Section 250Section 37(1)Section 44A

assessee has not submitted details to substantiate the commission expenses. In the circumstances, the Assessing Officer made addition of Rs.21,78,710/- as unexplained expenditure invoking the provisions of section 37(1) of the Act. 3. Aggrieved assessee preferred appeal before the ld. NFAC who vide impugned order confirmed

Vijay Sadwal, Faridabad Haryana vs. ITO, Ward-2(5), Faridabad

In the result, appeal of Revenue in ITA No

ITA 3554/DEL/2023[2017-18]Status: DisposedITAT Delhi07 Jan 2025AY 2017-18

Bench: Ms. Madhumita Roy & Shri Naveen Chandrathe Income-Tax Officer Vs. Shri Paras Jain Ward – 58(7) 164-B, Gali No. - 5 Delhi Azad Nagar, East Delhi

For Appellant: Shri Ajit Gandhi, CAFor Respondent: Ms. Harpreet Kaur Hansra Sr. DR
Section 147Section 148Section 148ASection 151ASection 69Section 69C

unexplained as per Sec.69 of the IT Act and Purchases made during the year amounting to Rs.14,56,840/- should not be treated as unexplained expenditure as per Sec.69C of the IT Act. It is to be mentioned here that the total turnover/ sales during the year under consideration

Mintu Das, Kolkata vs. ACIT, Cir. 28, Kolkata

In the result, appeal of the assessee is allowed as per terms indicated above

ITA 8/KOL/2024[2015-16]Status: DisposedITAT Kolkata06 Jan 2025AY 2015-16

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarmai.T.A. No.08/Kol/2024 Assessment Year: 2015-16 Mintu Das………………………...………........………………....Appellant C/O S. N. Ghosh & Associates, Advocates, 2, Garstin Place, 2Nd Floor, Suite No.203, Kolkata –1. [Pan: Adppd3034M] Vs. Acit, Circle-28, Kolkata…….……….…............................…..…..... Respondent Appearances By: Shri Somnath Ghosh, Advocate, Appeared On Behalf Of The Appellant. Shri Pradip Biswas, Addl. Cit- Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : October 21, 2024 Date Of Pronouncing The Order : January 06, 2025 आदेश / Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 13.11.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’) Pertaining To Assessment Year 2015-16. 2. In This Appeal, The Assessee Challenged The Validity Of The Assessment Proceedings Completed U/S 143(3) Of The Act & Consequent To That, An Addition Of Rs.69,42,916/- U/S 68 R.W.S. 115Bbe Of The Act & Further Addition Of A Sum Of Rs.4,86,004/- U/S 69 R.W.S. 115Bbe Of The Act. 3. Brief Facts Of The Case Are That The Assessee Filed His Return Of Income On 28.09.2015 By Declaring A Total Income Of Rs.16,50,920/-. The Case Of The Assessee Was Selected For Scrutiny Under Compulsory

Section 10(38)Section 115BSection 143(2)Section 143(3)Section 250Section 68Section 69

subjected to tax u/s 115BBE of the Act along with an amount of Rs.4,86,004/- on account of alleged unexplained expenditure in the hands of the assessee. 4. Dissatisfied with the above order, the assessee went in appeal before the ld. CIT(A), where, the ld. CIT(A) upheld

Ajay Shankarlal Bankda HUF, Mumbai vs. ITO-41(4)(1), Mumbai

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

ITA 4466/MUM/2023[2014-15]Status: DisposedITAT Mumbai03 Jan 2025AY 2014-15

Bench: SHRI B.R. BASKARAN (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)

Section 14ASection 69C

Those ledgers which was both debit and credit entries are considered for peak working.  Those ledgers which only have the debit entries considered as unexplained expenditure u/s 69C of the Act.  Those ledgers which have only credit entries considered as unexplained income u/s 69A of the Act. The Investigation Wing ... receipts, the same has been considered as unexplained money u/s 69A and wherever, the ledger contain only payments, the same has been considered as unexplained expenditure u/s 69C. In the this way, the year wise addition made in the hands of the assessee is tabulated as under:- A.Y. Receipts Payment

Om Parkash, Ludhiana vs. ITO, W-3, Khanna

ITA 693/CHANDI/2018[2010-11]Status: DisposedITAT Chandigarh02 Jan 2025AY 2010-11

Bench: Shri Mahavir Singh & Shri Krinwant Sahay

For Appellant: Shri Sudhir Sehgal, AdvFor Respondent: Smt. Kusum Bansal, CIT(DR)
Section 143(3)Section 147Section 148Section 68

regards to the other issue, i.e. addition made by the AO of Rs. 3,60,000/- on account of unexplained expenditure incurred on the transfer of land to Sh. Jaspreet Singh, it is directly connected with the first issue. Hence, this issue exactly on the same reasoning remanded back

Rajesh Choudhary, Gurgaon vs. ACIT Central Circle, Alwar

In the result, the appeal of the assessee is allowed

ITA 597/JPR/2024[2019-20]Status: DisposedITAT Jaipur01 Jan 2025AY 2019-20

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri R.S. Poonia, CAFor Respondent: Ms. Alka Gautam, CIT-DR
Section 127Section 133ASection 139Section 142(1)Section 143(2)Section 143(3)Section 263

with regard to expenses of Rs.1,26,874/- was not found satisfactory and the AO held that the amount of Rs.1,26,874/- was unexplained expenditure in terms of provisions of Section 69C of the Act and thus added this amount of Rs.1,26,874/- to the income ... That the Ld. A.O. passed an assessment order on 20.09.2021 by making an addition of Rs. 1,26,874/- on account of unexplained expenditure (i.e. as cash found short). 11. That further, Revision proceedings were initiated by Ld. PCIT (Central), Jaipur and issued a Show Cause Notice for revision proceeding

M/S Srimy Jewels Private Limited, Mumbai vs. The Assessing Officer, Assessment Unit, Income Tax Department, Mumbai

In the result the appeal filed by the assessee stands allowed

ITA 4892/MUM/2024[2013-14]Status: DisposedITAT Mumbai31 Dec 2024AY 2013-14

Bench: Smt Beena Pillaiassessment Year: 2013-14 M/S. Srimy Jewels Dcit Circle 4(3)(1), Private Limited Thrugh Mumbai. Mr. Subodh Modi, Director Of The Appellant Company Je-3010, Vs. Bhrat Diamond Bourse, Bandra Kurla Complex, Bandra East, Mumbai- 400051. Pan: Aagcs0025G Appellant : Respondent

For Appellant: RespondentFor Respondent: Ms. Pradnya Gholap (Sr. D.R.)
Section 143(3)Section 148Section 250(6)Section 68

amount. The Ld.AO thus computed 2% of Rs.1,63,00,000/- and made disallowance under section 69 C mounting to ₹ 3,26,000/- as unexplained expenditure. Aggrieved by the additions, the assessee preferred appeal before the Ld. CIT(A). 3. Before the Ld.CIT(A) assessee challenged valedictory of issuance