“undisclosed income”

Search & SeizureSection 153ASection 153A9,092 judgments

The decision most relied on for undisclosed income is CIT v. Kabul Chawla (380 ITR 573), cited in 3,235 judgments on BharatTax.

Leading authorities on undisclosed income

CIT v. Kabul Chawla

380 ITR 573 · 2016 · High Court

3,235

citing judgments

In a search assessment under Section 153A, additions can only be made for completed or non-abated assessment years if incriminating material relevant to those years is found during the search, although notice under Section 153A(1) is mandatorily issued for six assessment years preceding the search.

CIT v. Simit P. Sheth

356 ITR 451 · 2013 · High Court

1,465

citing judgments

Additions for alleged bogus purchases should be restricted to the profit element, not the entire turnover. The profit element is often estimated at 12.5% of the purported bogus purchases.

Commissioner of Income Tax v. Harjeev Aggarwal

290 CTR 263 · 2016 · High Court

583

citing judgments

Assessment based solely on a statement recorded under Section 132(4) of the Income Tax Act requires the statement to be relatable to incriminating material or evidence found during the search, especially when considering Section 158BB(1) which restricts computation of undisclosed income to evidence found during search.

CIT v. Anil Kumar Bhatia

352 ITR 493 · 2013 · High Court

537

citing judgments

Section 153A can be invoked to reassess income for all years under consideration prior to a search, even if returns for those years were processed under Section 143(1)(a). The Assessing Officer has the power to reassess total income in such cases without fetters.

CIT v. P. Mohanakala

291 ITR 278 · 2007 · Supreme Court

525

citing judgments

The Supreme Court emphasized that in the absence of concrete rebuttal by the assessee, circumstantial evidence holds significant weight, applying the doctrine of preponderance of probability, particularly when assessing undisclosed income or unexplained cash credits.

Society v. UOI

394 ITR 220 · 2017 · Supreme Court

493

citing judgments

Uncorroborated loose papers or documents found during a search operation have no evidentiary value and cannot be the sole basis for determining undisclosed income. Additions based on such material require independent evidence to establish trustworthiness and a direct link to the assessee.

CIT v. President Industries

258 ITR 654 · 2002 · High Court

471

citing judgments

When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.

CIT v. Gurinder Singh Bawa

386 ITR 483 · 2016 · High Court

416

citing judgments

If no incriminating material is found during a search operation regarding a particular issue, then no addition can be made concerning that issue in an assessment under section 153A of the Income-tax Act.

Judgments citing undisclosed income

Muqeem Ahmad, Ghaziabad vs. ITO Ward-1(4), Ghaziabad

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

ITA 1728/DEL/2023[2009-10]Status: DisposedITAT Delhi31 Jul 2023AY 2009-10

Bench: Shri Kul Bharat

Section 144Section 147Section 271(1)(c)

where assessee made cash deposit in his bank and Ld. A.O. initiated re- assessment proceedings on a fallacious assumption that bank deposit constituted undisclosed income overlooking the fact that source of deposit need not necessarily be income of assessee, assessment proceedings so initiated were to be set-aside". That

Muqeem Ahmad, Ghaziabad vs. ITO Ward-1(4), Ghaziabad

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

ITA 1727/DEL/2023[2009-10]Status: DisposedITAT Delhi31 Jul 2023AY 2009-10

Bench: Shri Kul Bharat

Section 144Section 147Section 271(1)(c)

Assistant Commissioner of Income Tax, Circle-1(1), Bhilai vs. Mesers Steelco Ispat Private Limited, Bhilai

In the result, appeal of the revenue is partly allowed for statistical purposes in terms of our aforesaid observations

ITA 88/RPR/2020[2014-15]Status: DisposedITAT Raipur31 Jul 2023AY 2014-15

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अपील सं./Ita No.88/Rpr/2020 ("नधा"रण वष" / Assessment Year: 2014-15)

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Shri V.K. Singh, CIT-DR

Section 142(1)Section 143(2)Section 14A

transaction that were discussed and remarked against each and every creditors by the A.O holding that the assessee had brought its own undisclosed income in the form of unsecured loan, share application money and sundry creditors and the same is assessable as unexplained cash credit u/s.68 ... then the department is free to proceed to reopen their individual assessment in accordance with law, but is cannot be regarded as undisclosed income of the assessee company. The Ld. CIT(Appeals) further placed his reliance in the case of ACIT Vs. Venkateshwar Ispat Pvt. Ltd. (supra) wherein

The DCIT1(1), Indore vs. Shri Ravi Arora, Indore

ITA 212/IND/2020[2011-12]Status: DisposedITAT Indore31 Jul 2023AY 2011-12

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year:2011-12 Dcit-5(1), Shri Ravi Arora, Indore 1007, Khatiwala Tank, बनाम/ 236, Indraprasth Tower, 6, M.G. Road, Vs. Indore. (Revenue / Appellant) (Assessee / Respondent) Pan: Agdpa8921H Assessee By Shri Yash Kukreja, Ca & Shri Hitesh Chimnani, Adv & Ld. Ars Revenue By Shri P.K.Mishra, Cit Dr Date Of Hearing 04.05.2023 Date Of Pronouncement 31.07.2023

Section 143(2)Section 143(3)Section 40A(3)Section 68

appearing in the list of “Loans & Advances” with an amount of Rs. 32,43,791/-. Based on this, the AO inferred that the undisclosed income of assessee had been routed through WCS from M/s Jayant. Lastly, the AO noted that the assessee did not furnish audit report, balance-sheet

Kishan Singh, Jaipur vs. ACIT Central Circle-4, Jaipur

Appeal of the assessee is allowed

ITA 83/JPR/2023[2013-14]Status: DisposedITAT Jaipur28 Jul 2023AY 2013-14

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

For Appellant: Shri Ashish KhandelwalFor Respondent: Shri Ajay Malik (CIT) a

Section 127Section 132Section 133ASection 143(3)

deposits, as these deposits remain unexplained. Therefore, an addition of Rs. 4,51,000/- is being made to the income of the assessee as undisclosed income. 4. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A)/NFAC. A propose to the grounds ... deposits, as these deposits remain unexplained. Therefore, an addition of Rs. 4,51,000/- is being made to the income of the assessee as undisclosed income. As per CIT (A) (Pg No. 12 of Impugned Order) The submissions of the appellant are very vague and do not explain with evidence

DCIT Central Circle-1(2), Mumbai vs. M/S. Bhupati Infrabuild Services Pvt. Ltd., Mumbai

ITA 899/MUM/2023[2018-19]Status: DisposedITAT Mumbai27 Jul 2023AY 2018-19

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Viraj Mehta, A.RFor Respondent: Shri S. Srinivasu, D.R

Section 132ASection 153C

basis of admission or confession during search action, it is necessary that some incriminating material must have been found to correlate the undisclosed income with such statement. ITA Nos.897, 898 & 899/M/2023 5 M/s. Bhupati Infrabuild Services Pvt. Ltd. (vi) Any statement recorded under section 132(4) cannot be considered

DCIT Central Circle-1(2), Mumbai vs. M/S. Bhupati Infrabuild Services Pvt. Ltd., Mumbai

ITA 898/MUM/2023[2017-18]Status: DisposedITAT Mumbai27 Jul 2023AY 2017-18

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Viraj Mehta, A.RFor Respondent: Shri S. Srinivasu, D.R

Section 132ASection 153C

DCIT Central Circle-1(2), Mumbai vs. M/S. Bhupati Infrabuild Services Pvt. Ltd., Mumbai

ITA 897/MUM/2023[2016-17]Status: DisposedITAT Mumbai27 Jul 2023AY 2016-17

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Viraj Mehta, A.RFor Respondent: Shri S. Srinivasu, D.R

Section 132ASection 153C

Kashyap K. Mehta, Mumbai vs. ACIT 21 (1), Mumbai

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

ITA 640/MUM/2023[2011-12]Status: DisposedITAT Mumbai27 Jul 2023AY 2011-12

Bench: Shri Prashant Maharishi, Am & Shri N. K. Choudhry, Jm

For Appellant: Shri. Vinod Kumar BindalFor Respondent: Ms. Shreekala Pardeshi, Ld

Section 10(38)Section 143(1)Section 143(3)Section 147Section 148Section 2Section 250Section 68Section 69C

additions of Rs. 52078411 /- by treating the capital gain transaction as non genuine and unexplained cash credit u/s 68 of the Act, representing, the undisclosed income and of Rs. 29,24,005/- being 6% of Rs. 4,87,33,411/- as commission u/s 69C of the Act, for providing arranged

Shrikanta Bajaj, New Delhi vs. Pr.CIT(Central) - 3, New Delhi

In the result, the appeals of the assessee are allowed

ITA 553/DEL/2021[2017-18]Status: DisposedITAT Delhi27 Jul 2023AY 2017-18

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year: 2017-18 Vikram Bajaj, Vs Pr. Cit (Central)-3, Rnp House, New Delhi. 1 Shivaji Enclave, Main Road, Near Raja Garden, New Delhi – 110 027. Pan: Acxpb6203D Assessment Year: 2017-18 Shrikanta Bajaj, Vs. Pr. Cit (Central)-3, Rnp House, New Delhi. 1 Shivaji Enclave, Main Road, Near Raja Garden, New Delhi – 110 027. Pan: Ahlpr0130J (Appellants) (Respondent) Assessee By : Shri Sumit Lalchandani, Advocate & Shri Shivam Yadav, Advocate Revenue By : Shri Prakash Nath Barnwal, Cit-Dr Date Of Hearing : 27.07.2023 Date Of Pronouncement : 27.07.2023 Order Per M. Balaganesh, Am: These Appeals In Ita No.552/Del/2021 & 553/Del/2021 For Ay 2016-17 Arise Out Of The Orders Of The Principal Commissioner Of Income Tax (Central), Delhi-

For Appellant: Shri Sumit Lalchandani, Advocate &For Respondent: Shri Prakash Nath Barnwal, CIT-DR

Section 153ASection 263

take cognizance of the same and proceeded to treat the on money receipts of Rs.6,32,69,000/- as undisclosed income of the assessee of Shri Vikram Bajaj on protective basis with an observation that the same would be reviewed based on the outcome of the settlement petition filed ... treating the order passed by the ld. AO as erroneous and prejudicial to the interests of the Revenue on the ground that the undisclosed income on sale of property ought to have been assessed on substantive basis in the hands of the assessee instead of assessing on protective basis

ACIT Central Circle-30, New Delhi vs. Kamana Industries Pvt Ltd, Sonipat

In the result, appeal of the Revenue is dismissed

ITA 4997/DEL/2019[2013-14]Status: DisposedITAT Delhi27 Jul 2023AY 2013-14

Bench: Shri Saktijit Dey & Shri M. Balaganeshassessment Year: 2013-14 Acit, Vs Kamana Industries Pvt. Ltd., Central Circle-30, Piau Maniyari, New Delhi. Narela Road, Kundli, Sonepat, Haryana – 131 028. Pan Aabck7580K (Appellant) (Respondent) Assessee By : Shri P.C. Yadav & Shri Shivam Garg, Advocate Revenue By : Ms Sapna Bhatia, Cit-Dr Date Of Hearing : 01.05.2023 Date Of Pronouncement : 27.07.2023 Order Per M. Balaganesh, Am: This Appeal In Ita No.4997/Del/2019 For Ay 2013-14 Arises Out Of The Order Of The Commissioner Of Income-Tax (Appeals)-30, New Delhi, In Appeal No.172/16- 17/2606 Dated 13.03.2019 [Hereinafter Referred To As ‘Ld. Cit(A)’, In Short] Against The Order Of Assessment Passed U/S 153A Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 29.12.2016 By The Ld. Income-Tax Officer, Central Circle-30, New Delhi (Hereinafter Referred To As ‘Ld. Ao’). 2. The Only Issue To Be Decided In This Appeal Is As To Whether The Ld.Cit(A) Was Justified In Deleting The Addition Made On Account Of Share Capital Received By The Assessee In The Sum Of Rs.7,10,00,000/- In The Facts & Circumstances Of The Instant Case.

For Appellant: Shri P.C. Yadav &For Respondent: Ms Sapna Bhatia, CIT-DR

Section 132Section 132(4)Section 143(1)Section 143(2)Section 143(3)Section 147Section 153ASection 68

Harjeev Aggarwal, reported in 241 Taxman 199 wherein it has been categorically held that a Director of a company surrendering certain sums as undisclosed income could not be construed as incriminating material found during the course of search. It is not in dispute that the entire addition made ... rival submissions and perused the material available on record. The issue in the present appeal is with respect to the addition made to undisclosed income. It is a fact that assessee had filed its original return of income on 30.09.2009 declaring loss of Rs. Rs.30,91,011/-. The return

ACIT, Central Circle-6, New Delhi vs. Mahesh Chand Goyal, New Delhi

In the result, the appeal is partly allowed

ITA 2602/DEL/2018[2014-15]Status: DisposedITAT Delhi27 Jul 2023AY 2014-15

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaassessment Year: 2014-15

Section 132Section 143(3)

regard), addition is being done on protective basis in A.Y. 2011-12. In view of above discussion, it is evident that the assessee has undisclosed income according to the provisions of Sec.271(1)(c) of the Act. Thus, the undersigned is satisfied that the assessee has furnished inaccurate particulars

CIT 3(1)(1), Mumbai vs. M/S. Ramlal Jwellers Private Limited, Mumbai

In the result, appeal of the Revenue is dismissed as well as Cross Objection of the assessee is dismissed as infructuous

ITA 1600/MUM/2023[2017-18]Status: DisposedITAT Mumbai26 Jul 2023AY 2017-18

Section 115BSection 133(6)Section 143(3)Section 68

sales which had been accepted by Sales Tax/VAT Department and not doubted by Assessing Officer then cash deposits could not have been treated as undisclosed income of assessee. 7.6 The AO has not pointed out any discrepancies in the sales bill, sales register etc. Purchases, sales and the Stock ... quantity of sales. Once the purchase and sales are verifiable, then such cash sales deposited in the bank account cannot be treated as undisclosed income. He thus, completely relied upon the order of the ld. CIT (A). 12. We find that the only reason given

Sushil Kaandgul, Mumbai vs. Income Tax Officer, Ward-22(3)(6), Mumbai

ITA 1442/MUM/2023[2011-12]Status: DisposedITAT Mumbai26 Jul 2023AY 2011-12

Bench: Shri Kuldip Singhassessment Year: 2011-12

For Appellant: Shri Ashwin Jain, A.RFor Respondent: Shri B. Laxmi Kanth, D.R

Section 143(3)Section 147Section 68Section 69C

erred in upholding the actions of the Assessing Officer of adding a sum of Rs.3,19,500/- as undisclosed income u/s 68 without appreciating that the net credit in the books of the Appellant was only Rs 14041/- and therefore addition should have been restricted to that extent only

Ketan Tokershi Shah, Mumbai vs. DCIT, CC--2, Thane

The appeal of the assessee is allowed

ITA 1107/MUM/2023[2016-17]Status: DisposedITAT Mumbai26 Jul 2023AY 2016-17

Bench: Vikas Awasthy () & Ms. Padmavathy S. ()

Section 143(2)Section 68

undisclosed, it has to be assessed in the hands of the firm only. Provisions of Chapter XIV-B relate only to assessment of undisclosed income which makes the position more than clear. There is no machinery to assess the income of the firm in the hands of the partner, merely ... assessment contained in the IT Act and therefore cannot be accepted as correct. 12. It is further to be noted that in similar circumstances, undisclosed income of Hotel Amritha at Calicut and all several other concerns has been assessed in the hands of the firms. Having made assessment

Shri Manmohan Singh, Jalandhar vs. Deputy Commissioner of Income Tax Central Circle-1, Jalandhar

In the result, ground no. 4 of the appeal of the assessee is allowed

ITA 171/ASR/2023[2018-19]Status: DisposedITAT Amritsar26 Jul 2023AY 2018-19

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjeei.T.A. No.171/Asr/2023 Assessment Year: 2018-19

Section 132Section 153Section 153ASection 2(22)(e)Section 250

No.171/Asr/2023 7 Assessment Year: 2018-19 genuine, being only a device/make belief based on non-existent facts or suppressed/misrepresented facts, fulfilling the ingredients of undisclosed income, would constitute an 'incriminating material' sufficient to make assessment for the purposes of the Act. A mere statement U/s 132(4) is an evidence

Assistant Commissioner of Income Tax Circle-1, Jammu vs. M/S Mohd Asraf Sheikh, Jammu

In the result, the appeal of the Revenue is allowed

ITA 212/ASR/2019[2015-16]Status: DisposedITAT Amritsar26 Jul 2023AY 2015-16

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Vinay Jamwal, CAFor Respondent: Smt. Ratinder Kaur, Sr. DR

Section 68

capacity of the person from whom he had allegedly taken the loan. The loan amount was rightly held to be the assessee’s own undisclosed income. 11. The principles which emerge where sums of money are credited as Share Capital/Premium are: • The assessee is under a legal obligation to prove

Shrimati Amarjit Kaur W/O Bugar Singh, Mansa vs. Income Tax Officer Ward 1(4), Mansa

In the result, the appeal of the assessee is dismissed

ITA 1/ASR/2018[2009-10]Status: DisposedITAT Amritsar26 Jul 2023AY 2009-10

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: NoneFor Respondent: Sh. S. M. Surendranath, Sr. DR

Section 147Section 148Section 251(2)Section 49

bank account but then such an opinion proceeds on the fallacious assumption that the bank deposits constitute undisclosed income, and overlooks the fact that the sources of deposit need not necessarily be income of the assessee. Of course, it may be desirable, from the point of view of revenue authorities ... para 8 above, the necessary conclusion drawn on the basis above was that it is fallacious to draw an assumption that bank deposits constitute undisclosed income because it overlooks the fact that the sources of deposit need not necessarily be income of the assessee; iv) In para 8 above, another

M/S. Niraguna Balik Satsang Mandal (India), New Delhi vs. DCIT, New Delhi

Appeals of the assessee are allowed, for statistical purposes

ITA 267/DEL/2017[2007-08]Status: DisposedITAT Delhi26 Jul 2023AY 2007-08

Bench: Shri G. S. Pannu, Hon’Blea N D Shri Amit Shukla

Section 11(1)Section 132Section 143(3)Section 153A

making the assessment u/sec. 153A of the said Act only on the basis of sum incriminating materials unearthed during the course of search or undisclosed income or property discovered during the course of search and that in the case of the appellant no incriminating material whatsoever was found during ... search, held that in such circumstances the income in the foreign bank I.T.A. Nos. 264 TO 267/Del/2017 account is to be taxed as undisclosed income. Accordingly the Assessing Officer has made the addition after making the following observations:- “14.4 From the details in the Document and the evasive replies

M/S. Niraguna Balik Satsang Mandal (India), New Delhi vs. DCIT, New Delhi

Appeals of the assessee are allowed, for statistical purposes

ITA 266/DEL/2017[2006-07]Status: DisposedITAT Delhi26 Jul 2023AY 2006-07

Bench: Shri G. S. Pannu, Hon’Blea N D Shri Amit Shukla

Section 11(1)Section 132Section 143(3)Section 153A