“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

ACIT 2(3) (1), Mumbai vs. M/S. Thakkr Housing Development Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2135/MUM/2021[2012-13]Status: DisposedITAT Mumbai22 Aug 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

addition can be made on mere statement made u/s 132(4) without bringing any corroborative evidence. The CBDT Circular reads as under : "Admissions of undisclosed income under coercion/pressure during search/survey - Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessee’s were coerced to admit undisclosed ... since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole

ACIT 2(3) (1), Mumbai vs. M/S. Thakkar Apana Ghar Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2134/MUM/2021[2014-15]Status: DisposedITAT Mumbai22 Aug 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

ACIT 2(3) (1), Mumbai vs. M/S. Thakkar Apna Ghar Nirman Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2133/MUM/2021[2012-13]Status: DisposedITAT Mumbai22 Aug 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

ACIT 2(3) 1, Mumbai vs. M/S. Thakkar Grih Nirman Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2132/MUM/2021[2014-15]Status: DisposedITAT Mumbai22 Aug 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

ACIT 2(3) (1), Mumbai vs. M/S. Thakkar Housing Developement Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2131/MUM/2021[2014-15]Status: DisposedITAT Mumbai22 Aug 2022AY 2014-15

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

Sharmila Arun Patil, Mumbai vs. ITO Ward-1(4), Kalyan

In the result, appeal by the assessee is allowed for statistical purpose

ITA 112/MUM/2021[2009-10]Status: DisposedITAT Mumbai22 Aug 2022AY 2009-10

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri N.A. KulkarniFor Respondent: Ms. Smita Nair, Sr. AR

Section 143(1)Section 144Section 147Section 194Section 250Section 253(3)

absence of any response / explanation from the assessee, the Assessing Officer vide order dated 20/03/2015, considered the total receipts of Rs.11,72,570, as undisclosed income of the assessee and added the same to the total income of the assessee. 5. In appeal before the learned CIT(A), assessee filed

M/S Gokula Education Foundation, Bangalore vs. Additional Director of Income Tax Range-17, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 945/BANG/2017[2011-12]Status: DisposedITAT Bangalore18 Aug 2022AY 2011-12

Bench: Shri George George K. & Shri Padmavathy Sassessment Year: 2011-12

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Dev Ratan Kumar, CIT(DR)(ITAT), Bengaluru

Section 11(1)(a)Section 11(2)Section 12ASection 139(1)Section 142(1)Section 143(1)Section 143(3)

taxation of Charitable trusts. 47. In the instant case, the AO has added the impugned amount of Rs 58.02 crores, as if it were undisclosed income of the assessee, which is not legally correct. In our view, the amount so applied for purposes other than the objects of the trust ... shall not represent "undisclosed income" of the assessee, since there is difference between "receipt of income" and "application of income". The former is generation of receipts and the later is spending of those receipts. In any case, we have held that there is no basis for making the addition

Dell India Private Ltd., Bangalore vs. JCIT, Bangalore

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

ITA 562/BANG/2015[2010-11]Status: DisposedITAT Bangalore18 Aug 2022AY 2010-11

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri T. Suryanarayana, Senior AdvocateFor Respondent: Shri Praveen Karanth, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 92C

clarify is that it was not correct on the part of the AO to characterize the sum of Rs.5,38,22,153 as undisclosed income. The income is disclosed in the books of accounts but is not recognized for the purpose of income tax computation because of the Assessee

Sri B.V. Sreenivasa Reddy, Bellary vs. The Deputy Commissioner of Income Tax, Central Circle-1(3), Bangalore

In the result, the appeal filed by assessee stands allowed

ITA 372/BANG/2022[2012-13]Status: DisposedITAT Bangalore16 Aug 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2012-13 Shri B.V. Sreenivasa Reddy, The Deputy Srinagar Colony, Commissioner Of Near Arunodhaya Income Tax, Hospital, Central Circle – 1[3], Siriguppa Road, Bangalore. Vs. Bellary. Pan: Afbpr9736C Appellant Respondent Assessee By : Ms. Sunaina Bhatia, Advocate : Shri Venudhar Godesi, Jcit Revenue By Dr Date Of Hearing : 19-07-2022 Date Of Pronouncement : 16-08-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 19/01/2022 Passed By The Ld.Cit(A)-11, Bangalore For A.Y. 2012-13 On Following Grounds Of Appeal: “1. The Orders Of The Authorities Below In So Far As Levying Penalty U/S 271[1][C] Of The Act Against The Appellant Are Opposed To Law, Equity, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Case. 2. The Order Of Penalty Passed U/S 271[1][C] Of The Act Is Bad In Law As The Notice Issued Under Section 274 Rws 271 Of The Act Is Not Discernable Whether The Penalty Proceedings Are Initiated For Furnishing Of Inaccurate Particulars Of Income Or Concealment Of Income Under The Facts & In The Circumstances Of The Appellant'S Case.

For Appellant: Ms. Sunaina Bhatia, Advocate

Section 148Section 271Section 271(1)(c)Section 274

assessment was reopened u/s. 148 of the Act. In the assessment proceedings, cash found of Rs.1.30 Crores was considered to be undisclosed income in the hands of the assessee. 2.2 Subsequently, a penalty notice u/s. 271(1)(c) was issued to assessee and the penalty of Rs.40

C.N.Babu, Ramanagaram vs. Income Tax Officer Ward-1, Ramanagara

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

ITA 356/BANG/2019[2008-09]Status: DisposedITAT Bangalore16 Aug 2022AY 2008-09

Bench: Shri N. V. Vasudevan & Shri Laxmi Prasad Sahuassessment Year : 2008-09 Shri. C. N. Babu, Vs. Ito, Prop: Hotel Chirag, Ward – 1, B. M. Road, Bidadi, Ramanagara. Ramanagaram Taluk – 562 109. Pan : Ajxpb 4497 N Appellant Respondent Assessee By : Shri. Raghavendra R. Chakravarthy, Ca Revenue By : Shri. K. R. Narayana, Addl. Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 08.08.2022 Date Of Pronouncement : 16.08.2022 O R D E R Per N. V. Vasudevanthis Is An Appeal By The Assessee Against The Order Dated 27.12.2018 Of Cit(A) – 3, Bengaluru, Relating To Assessment Year 2008-09. 2. Ground Nos.1, 11 & 12 Raised By The Assessee Are General In Nature & Does Not Require Any Adjudication. Ground No.2 Raised By The Assessee Reads As Follows:

For Appellant: Shri. Raghavendra R. Chakravarthy, CAFor Respondent: Shri. K. R. Narayana, Addl. CIT(DR)(ITAT), Bengaluru

Section 46ASection 68

books as also the written c* books are hereby rejected as not genuine.” 10. The AO therefore treated the aforesaid two cash deposits as undisclosed income of the assessee. On appeal by the assessee, the CIT(A) confirmed order of the AO for the following reasons: “4.20 As regards ... view that cash deposits in the aforesaid Canara Bank Ac/ should also be added to the total income of the assessee as undisclosed income under section 69 of the Act because the assessee failed to give a satisfactory explanation with regard to source of funds out of the aforesaid cash

Smt.Sushiladevi Jain, Mumbai vs. ACIT-22(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4015/MUM/2018[2011-12]Status: DisposedITAT Mumbai11 Aug 2022AY 2011-12

Section 143(3)Section 68

marble business. Nothing prevented the revenue from making indiscriminate enquiries in the hands of the assessee’s father in law and consider the alleged undisclosed income in his hands. This was admittedly not done by the revenue in the instant case. 7. In view of the above, we hold that

DCIT-CC-7(3), Mumbai vs. Shri Majni Karamshi Patel, Mumbai

In the result, the cross objections of the assessee and the appeal filed by the revenue is dismissed

ITA 6128/MUM/2019[2014-15]Status: DisposedITAT Mumbai10 Aug 2022AY 2014-15

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyal, Accountat Member Dcit, Cc-7(3) Vs. Shri Manji Karamshi Room No. 655, Patel Aayakar Bhavan, Office No. 1, Patel M.K.Road, Bhavan-29, Vijaywadi, Mumbai.-400020. Dr. Nagindas N Shah Lane Chira Bazar, Mumbai – 400002. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabpp0130D Appellant .. Respondent Co No. 45/Mum/2021 (A.Y: 2014-15) Shri Manji Karamshi Vs. Dcit, Cc-7(3) Patel Room No. 655, Aayakar Office No. 1, Patel Bhavan, Bhuvan-29, Vijaywadi, M.K .Road, Dr. Nagindas N Shah Mumbai-400002. Lane Chira Bazar, Mumbai – 400002. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabpp0130D Appellant .. Respondent

For Appellant: Shri.Rushab Mehta.ARFor Respondent: Shri .T .Shankar.DR

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 148Section 68

investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. d) M/s. Komal Agrotech P. Ltd. v. ITO (ITA No. 437/Hyd/2016): '9.1 A plain reading of the assessment order demonstrate that

Sri Rathan Babulal Lath, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(4), Bangalore

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

ITA 157/BANG/2020[2009-10]Status: DisposedITAT Bangalore05 Aug 2022AY 2009-10

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2009-10

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Shri Vilas V. Shinde, D.R

Section 132Section 153A

material available on record he made an addition of Rs.17 lakh in the hands of the assessee by treating the same as undisclosed income. On appeal, the CIT(A) set aside the findings of the AO and deleted the additions of Rs.17 lakhs. The matter went to the Tribunal ... 153A of the Act only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search, which are not produced or not already disclosed or made known in the course of original assessment

Devendra Rajnikant Ladhani, Mumbai vs. ACIT, Central Circ;E-3, Mumbai

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

ITA 178/MUM/2021[2015-16]Status: DisposedITAT Mumbai03 Aug 2022AY 2015-16

Bench: Shri Pavan Kumar Gadala & Shri Gagan Goyaldevendra Rajnikant Ladhani, 1, Om Building, Opp. Rishi Vihar Complex, Bolinj Road, Virar (W), District-Palghar-401303 Pan: Abfpl5079C ...... Appellant Vs. Acit, Central Circle-3, 6Th Floor, Ashar It Park, Wagle Industrial Estate, Road No.16X, Thane (West)-400604. ..... Respondent Appellant By : Sh. Subhodh Ratnaparkhi Respondent By : Sh. Nimesh Yadav, Cit-Dr Date Of Hearing : 09/05/2022 Date Of Pronouncement : 03/08/2022 Order Per Gagan Goyal, A.M: This Appeal By The Assessee Is Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals) -11, Pune [Hereinafter Referred To As (‘Ld. Cit(A)’) Dated 30.12.2020 For The Assessment Year (Ay) 2015-16. The Assessee Has Raised The Following Grounds Of Appeal: “The Hon. Cit(A) Erred In Upholding The Addition Of Rs.3,82,84,000/- Made U/S 69A Of The It. Act, 1961 As Unexplained Money On Account Of Cash Found At The Residence & From The Bank Lockers Of The Appellant During The Course Of 2 Ita No. 178/Mum/2021- Devendra Ranjikant Ladhani

For Appellant: Sh. Subhodh RatnaparkhiFor Respondent: Sh. Nimesh Yadav, CIT-DR

Section 132Section 132(4)Section 143(3)Section 69A

parties reflected on seized paper. It is stated that the cash receipts totalling Rs.69,73,77,100/-, have been taxed as undisclosed income in the hands of M/s RADHE by the AO for AY 2011-12 to AY 2015-16 and this has also been confirmed in appeal ... have been decided by this office by order dtd.23/3/2020 and the cash receipts of Rs.59,73,77,100/- have been upheld as undisclosed income of M/s RADHE for A.Yrs 2011-12 to 2015-16. It is therefore claimed that the same amount cannot be taxed twice, once in the hands

DCIT 15(2)(2), Mumbai vs. M/S Premier Supplies & Services P Ltd, Navi Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1384/MUM/2020[2011-12]Status: DisposedITAT Mumbai03 Aug 2022AY 2011-12

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – 15(2)(2) V. M/S. Premier Supplies & Services Pvt. Ltd., Office No. 47, Satya Sai Plaza Room No. 357, 3Rd Floor Sector-11, Plot No. 5 Aayakar Bhavan, M.K. Road Panvel, Navi Mumbai - 410206 Mumbai - 400020 Pan: Aaccg2655A (Appellant) (Respondent) Assessee By : None Department By : Shri Nihar Ranjan Samal

For Appellant: NoneFor Respondent: Shri Nihar Ranjan Samal

Section 143(3)Section 148Section 68

assessee. If the department does not came with material evidence to prove the same, then the same amount cannot be added as undisclosed income of the assessee. ACIT vs Lata Mangeshkar: 97 ITR 696 (BOM) In this case, the assessee, who is an acknowledged play-back singer, disclosing professional receipts

Sri. K. Satish Kumar, Bengaluru vs. The Additional Commissioner of Income Tax, Range-9, Bangalore

In the result, the assessee’s appeal is allowed

ITA 1988/BANG/2016[2007-08]Status: DisposedITAT Bangalore01 Aug 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2007-08

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Dr. Manjunath Karkihalli, D.R

Section 133A(1)Section 143(3)Section 234Section 234A

cases, with the introduction of section 142A of the Act, a reference to the Valuation Officer can be made 'in effect' to determine the undisclosed income of the assessee under such circumstances as held by the Courts as discussed above. Even otherwise, it is seen that reference to an expert

DCIT Central Circle(1), Mumbai vs. Shri Kumar Rasiklal Mehta, Mumbai

In the result, all the appeals filed by the Revenue as well as cross objections filed by the assessee are dismissed

ITA 441/MUM/2022[2007-08]Status: DisposedITAT Mumbai29 Jul 2022AY 2007-08

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Harsh Kapadia, A.RFor Respondent: Shri Tejinder Pal Singh, D.R

Section 143(3)Section 147Section 271(1)(c)Section 274Section 69A

with section 147 of the Income Tax Act, 1961 (for short ‘the Act’) making identical additions under section 69A of the Act being the undisclosed income, penalty proceedings have been initiated by way of issuance of notice under section 274 read with section 271(1)(c) of the Act. Assessment ... dated 19.03.2014, the income so offered in the revised Rol is not disturbed. No where in the assessment order, any addition of any undisclosed income has been made by the AO. As such the revised return of income has been accepted by the AO. It is further observed that

Dy.CIT Central Circle(1), Mumbai vs. Shri Kumar Rasiklal Mehta, Mumbai

In the result, all the appeals filed by the Revenue as well as cross objections filed by the assessee are dismissed

ITA 440/MUM/2022[2006-07]Status: DisposedITAT Mumbai29 Jul 2022AY 2006-07

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Harsh Kapadia, A.RFor Respondent: Shri Tejinder Pal Singh, D.R

Section 143(3)Section 147Section 271(1)(c)Section 274Section 69A

DCIT Central Circle-2(1), Mumbai vs. Shri Kumar Rasiklal Mehta, Mumbai

In the result, all the appeals filed by the Revenue as well as cross objections filed by the assessee are dismissed

ITA 438/MUM/2022[1997-98]Status: DisposedITAT Mumbai29 Jul 2022AY 1997-98

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri Harsh Kapadia, A.RFor Respondent: Shri Tejinder Pal Singh, D.R

Section 143(3)Section 147Section 271(1)(c)Section 274Section 69A

M/S. Haris Marine Products, Mangaluru vs. Principal Commissioner of Income Tax (Central), Bengaluru

In the result, the appeal by the assessee is allowed

ITA 383/BANG/2022[2017-18]Status: DisposedITAT Bangalore29 Jul 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Smt. Susan Dolores George, CIT(OSD)

Section 143Section 153DSection 263

Court of Madras in [2014] 52 taxmann.com 449 (Madras) held that where assessee himself stated in sworn statement during search and seizure about his undisclosed income, same was to be levied tax on basis of admission even without scrutinizing documents. 7.8 The Hon'ble Supreme Court of India has upheld