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“unexplained cash credit”

Cash Credits & Unexplained ItemsSection 68Section 687,118 judgments

The decision most relied on for unexplained cash credit is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on unexplained cash credit

Sumati Dayal v. CIT
214 ITR 801 · 1995 · Supreme Court
1,967
citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

CIT v. Orissa Corporation Pvt. Ltd.
159 ITR 78 · 1986 · Supreme Court
897
citing judgments

When an assessee provides the identity and address of a creditor or investor for a cash credit or share capital under Section 68, the burden shifts to the Department to establish lack of genuineness or creditworthiness, requiring it to conduct further inquiries; mere non-compliance by third parties to summons cannot be the sole basis for an adverse inference against the assessee.

(Central)-1 v. NRA Iron & Steel (P) Ltd.
103 Taxmann.com 48 · 2019 · Supreme Court
696
citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.
342 ITR 169 · 2012 · High Court
658
citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Kale Khan Mohammad Hanif v. CIT
50 ITR 1 · 1963 · Supreme Court
581
citing judgments

The assessee bears the onus of proving the source and nature of any sum of money or receipt found to have been received by them. If the assessee fails to satisfactorily explain the receipt, the Income-tax Officer is entitled to treat it as taxable income.

Lalchand Bhagat Ambica Ram v. CIT
37 ITR 288 · 1959 · Supreme Court
570
citing judgments

Where an assessee maintains regular books of account, and these books are not rejected or found defective by the Assessing Officer, any cash deposits or available cash shown in the cash book, if sufficient to cover the transaction, cannot be treated as unexplained income or an addition under sections 68 or 69A.

CIT v. Daulat Ram Rawatmull
87 ITR 349 · 1973 · Supreme Court
525
citing judgments

The onus to prove that an apparent transaction or explanation is not real lies with the person who claims it to be so. If an assessee provides a plausible explanation for a transaction, the revenue must establish that the apparent transaction is not genuine.

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.

Judgments citing unexplained cash credit

Piyush Jain, Indore vs. Income Tax Officer-4(4), Indore, ITO

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

ITA 368/IND/2024[2017-18]Status: DisposedITAT Indore07 Mar 2025AY 2017-18

Bench: Sh. Bhagirath Mal Biyani & Sh. Udayan Dasgupta

For Appellant: Sh. Gagan Tiwari & Ms. Priyal Jain, ARsFor Respondent: Sh. Ashish Porwal, Sr. D. R
Section 143(3)Section 199CSection 250Section 68

declaring NIL income. Case of assessee was selected for scrutiny. Assessment order came to be passed by making an addition u/s 68 as unexplained cash credit. CIT(A) dismissed appeal filed by assessee. It was held that specific case of assessee is that sale proceeds of jewellery were source ... observed that the AO had treated the cash deposited in the bank during the demonetization period in demonetized currency as unexplained cash credit u/s 68 of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc. was evident from the entries

Kapil Taneja, Jaipur vs. ACIT Circle 3, Jaipur

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

ITA 13/JPR/2025[2016-17]Status: DisposedITAT Jaipur07 Mar 2025AY 2016-17

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

For Appellant: Shri Tarun Mittal, C.AFor Respondent: Mrs. Swapnil Parihar, JCIT-DR
Section 142(1)Section 143(2)Section 143(3)Section 68

surprise of assessee, eventually ld.AO has made addition to the tune of Rs.82,00,000/- by alleging unsecured loans taken by assessee as unexplained cash credit u/s 68 of the Income Tax Act. Your hobours would appreciate that such action of ld.AO is contrary to the principle of natural justice

Sujan Infrastructure Pvt. Ltd., Ahmedabad vs. The Dy.CIT, Central Circle-1(2), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 474/AHD/2024[2006-07]Status: DisposedITAT Ahmedabad07 Mar 2025AY 2006-07

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyal

For Appellant: Shri Tushar Hemani, Sr Advocate &For Respondent: Shri Yogesh Mishra, Sr. DR
Section 132(1)Section 250Section 271(1)(c)

assessment order dated 31.12.2008. The Assessing Officer made addition of Rs.70.95 lakhs on account of unaccounted investments, Rs.33 lakhs on account of unexplained cash credits, Rs.70 lakhs on account of unaccounted income – totaling to Rs.174 lakhs. The Assessing Officer levied penalty on the amount confirmed

ITO WD 2(1), Kol, Kolkata vs. Infinity Housing Projects Private Limited, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 2255/KOL/2024[2013-14]Status: DisposedITAT Kolkata07 Mar 2025AY 2013-14

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 133Section 142(1)Section 147Section 148Section 68

assessee and after considering and rejecting the reply of the assessee filed in response to show cause , treated the said unsecured loans as unexplained cash credit for the reason that the huge loans were taken from the parties having no creditworthiness and that the assessee has failed to offer

ITO, Ward-25(2), New Delhi vs. Telplay Packaging Solutions P.Ltd, New Delhi

The appeal of the Revenue is dismissed

ITA 5892/DEL/2017[2012-13]Status: DisposedITAT Delhi07 Mar 2025AY 2012-13

Bench: SHRI ANUBHAV SHARMA (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 14ASection 234BSection 68

advocate for the Revenue, reiterated the grounds on which the Tribunal has affirmed the addition of the amount of Rs. 11.20 lakhs as unexplained cash credit. He particularly emphasised that the assessee's contention that the entries are only adjustment entries is not acceptable, because the adjustment entries ... there is no real credit of cash to its cash book ; the question of inclusion of the amount of the entry as unexplained cash credit cannot arise. One of the grounds of the Tribunal for disbelieving the assessee's case is that the adjustment entries were made by notional cash

ACIT, New Delhi vs. Shri Hridey Vikram Bhatia, New Delhi

The appeal is allowed

ITA 3173/DEL/2016[2011-12]Status: DisposedITAT Delhi07 Mar 2025AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandraassessment Year: 2018-19 Vs. Sh. Suresh Kumar Goyal, Acit, Circle-49(1), A-1/102, Ground Floor, New Delhi Janak Puri, Delhi Pan: Aaapg4996R (Appellant) (Respondent) Assessee By None Department By Sh. Manish Gupta, Sr. Dr

Section 143(3)Section 68Section 80G

total income of the appellant. Being aggrieved by the aforesaid addition of Rs. 1,60,20,000/- as ‘Unexplained Cash Credit u/s 68 of the Act’, the appellant has filed this appeal. 3. Grounds of appeal filed by the appellant as per Form 35: 3.1 The amount of Rs.1 ... added to the total income, as it is not explained cash credit. 3.2 That the amount should not be considered as unexplained cash credit. 3.3 Any other grounds as may be urged at the time of hearing. 4. During the course of appellate proceedings, the appellant has furnished his written

ACIT, New Delhi vs. M/S Splendor Landbase Ltd., New Delhi

In the result, the Assessee’s appeal is allowed for statistical purposes

ITA 2462/DEL/2016[2011-12]Status: DisposedITAT Delhi07 Mar 2025AY 2011-12

Bench: Shri Shamim Yahya

For Appellant: Sh. Rasik Makkar, CAFor Respondent: Sh. Rajesh Kumar Dhanesta, Sr. DR
Section 143(3)

outstanding provisions. During the year assessee has deposited cash of Rs. 24,70,000/- in its bank account, the same was treated as unexplained cash credits in the hands of the assessee. Upon assessee’s appeal, Ld. CIT(A) partly allowed the appeal of the assessee. Against the aforesaid action

Vivek Industries & Co., Dhanbad vs. DCIT/ACIT Circle-1, Dhanbad

In the result, appeal of the assessee stands allowed

ITA 290/RAN/2024[2017-18]Status: DisposedITAT Ranchi06 Mar 2025AY 2017-18

Bench: Shri George Mathan & Shri Ratnesh Nandan Sahay

For Appellant: Shri Devesh Poddar, AdvocateFor Respondent: Shri Khubchand T. Pandya, Sr. DR
Section 250

Crore had been shown in the Balance Sheet of the assessee, the Assessing Officer disbelieved the transaction and treated the capital introduced as unexplained cash credit. It was the submission that the capital introduction of a partner in the firm per se can never be treated as unexplained cash credits ... therefore, the said entry of the capital introduction of Rs. 4 Crore in the hands of the firm cannot be treated as unexplained cash credit in the hands of the firm in so far as the capital introduction by the managing partner who introduced the share capital. Therefore, the addition

A.M. Suppliers (P) Ltd, Surat vs. ITO, Ward 1(1)(1), Surat

In the result, ground No. 1 of appeal is partly allowed

ITA 1114/SRT/2024[2017-18]Status: DisposedITAT Surat06 Mar 2025AY 2017-18

Bench: Shri Pawan Singh & Shri Bijayananda Pruseth(Physical Hearing) A.M. Suppliers (P) Ltd., I.T.O., Shop No. 1, Rajhans Building, Ward-1(1)(1), Vs. Ring Road, Surat-395002. Surat. Pan No. Aadca 3136 B Appellant/ Assessee Respondent/ Revenue

Section 115BSection 133(6)Section 254(1)Section 68

result should not be rejected and gross profit be estimated and as to why Rs. 50,50,000/- should not be treated as unexplained cash credit under Section 68 of the Act. The assessee was asked to file reply by 20.12.2019. The assessee filed its detailed reply. Contents of reply

Income Tax Officer, Ward-1(1), Jaipur vs. Sujeet Singh Chouhan, Jaipur

In the result, the appeal of the revenue is allowed for statistical purposes with the above directions and the C

ITA 1361/JPR/2024[2017-18]Status: DisposedITAT Jaipur06 Mar 2025AY 2017-18

Bench: Shri Sandeep Gosain & Shri Gagan Goyalincome Tax Officer, Ward-1(1), Jaipur – 302 005 ...... Appellant Vs.

For Appellant: Mr. Vikash Rajvanshi, CA, Ld. ARFor Respondent: Mr. Manoj Kumar,JCIT, Ld. DR
Section 250Section 68Section 69A

deleting the addition of Rs. 10,00,000/- made by the AO on account of capital introduced by the assessee is treated as unexplained cash credit u/s. 68 of the I.T. Act, 1961. 4. Whether on the facts and in the circumstances of the case ... wrongly objecting on the decision of CIT(A) on justified deletion of wrong addition of Rs. 10,00,000/- u/s. 68 as unexplained cash credit whereas this was loan taken and correctly capital introduced by the assessee which were duly furnished to the CIT(A) who after due verification

Deputy Commissioner of Income Tax Central Circle-2 Ludhiana, Ludhiana vs. Amarjit Singh, Bathinda

In the result, Cross Objections of the assessee

ITA 774/CHANDI/2023[2019-20]Status: DisposedITAT Chandigarh06 Mar 2025AY 2019-20

Bench: Shri Rajpal Yadav & Shri Krinwant Sahay

For Appellant: Shri Pankaj Bhalla, CAFor Respondent: Shri Rohit Sharma, CIT DR
Section 115BSection 143(3)Section 153ASection 153CSection 250Section 253Section 68

related to him and does not represent his income in any form and the other part (opening balance)is unexplained cash credit. In fact, in case if the part transactions are wrong, there is no reason to make unexplained cash credit. In fact, in case if the part transactions

Income Tax Officer, Ward-1, Warangal vs. Sathish Ponnam, Parkal

In the result, appeal of the Revenue is dismissed

ITA 929/HYD/2024[2016-17]Status: DisposedITAT Hyderabad06 Mar 2025AY 2016-17

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA KA Sai PrasadFor Respondent: Dr. Sachin Kumar, SR. AR
Section 133(6)Section 143(3)Section 68

savings bank accounts, the Assessing Officer treated ITA.No.929/Hyd./2024 the total cash deposits of Rs.3,44,85,085/- as unexplained cash credits u/sec.68 of the Act and made the addition vide order dated 29.12.2018 passed u/sec.143(3) of the Income Tax Act, 1961. 3. On being aggrieved, the assessee ... cash given to the assessee. Therefore, the Assessing Officer opined that the total credits including cash deposits into bank account were treated as unexplained cash credits of the assessee and thus, addition has been made u/sec.68 of the Income Tax Act, 1961. It was the argument of the assessee before

Avijit Roy, Hooghly vs. ITO, Ward 23(3), Hooghly

In the result, the appeal of the assessee is allowed for statistical purpose with the directions given above

ITA 5/KOL/2024[2017-18]Status: DisposedITAT Kolkata06 Mar 2025AY 2017-18

Bench: Shri George Mathan & Shri Rakesh Mishraassessment Year: 2017-18

For Appellant: Shri Somnath Ghosh & Shri Sarnath GhoshFor Respondent: Shri Arun Kumar Meena, Addl. CIT, Sr. DR
Section 250Section 69

that the Assessing Officer held that the amount of Rs. 18 lakh deposited by the assessee in the demonetized currency was stated as unexplained cash credit on the ground that the cash deposit did not match with the normal pattern of business habit of the assessee and that the source

A and M Home Solution Private Limited., Kolkata vs. ITO, WD-7(1), Kolkata.

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

ITA 1121/KOL/2023[2012-13]Status: DisposedITAT Kolkata06 Mar 2025AY 2012-13

Bench: Shri George Mathan & Shri Rakesh Mishra

For Appellant: NoneFor Respondent: Shri Arun Kumar Meena, Addl. CIT, Sr. DR
Section 250Section 68

contrary to law and the facts of the appellant’s case in so far as it relates to addition on account of unexplained cash credit. 2. That on the facts and in the circumstances of the case the National Faceless Appeal Centre (NFAC) has erred in confirming the order ... regarding the addition of Rs.83,52,140/- made by the learned Assessing Officer on account of unsecured loan received by the appellant as unexplained cash credit and the same should be deleted. 3. That on the facts and circumstances of the case the NFAC has totally ignored the fact that

M/S. Emerald Properties Pvt. Ltd., Kolkata vs. ITO, Ward-5(3), Kolkata.

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

ITA 1043/KOL/2023[2012-13]Status: DisposedITAT Kolkata06 Mar 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy(Kz) & Shri Rakesh Mishra

Section 131Section 143(3)Section 250Section 68

aside. 4) For that in the facts and circumstances of the case the addition of Rs.7,25,67,000/ made on account of unexplained cash credit being share capital and premium u/s 68 of the Income Tax Act, 1961 this was not justified and thus the same be deleted

M/S Everlike Mercandise Pvt Ltd, Kolkata vs. ITO, Ward-5(3), Kolkata

In the result, the appeal of the assessee is allowed for statistical purpose subject to above directions

ITA 600/KOL/2021[2012-13]Status: DisposedITAT Kolkata06 Mar 2025AY 2012-13

Bench: Shri George Mathan & Shri Rakesh Mishraassessment Year: 2012-13

For Appellant: Shri Miraj D. Shah, ARFor Respondent: Shri Yogesh Mehare, Sr. DR
Section 14ASection 250Section 68

this case the Ld. CIT(A) has confirmed the addition of Rs.3,24,65,000/- made by the Assessing Officer on account of unexplained cash credit being share capital and premium u/s. 68 of the 2 M/s. Everlike Mercandise Pvt. Ltd. AY: 2012-13 Act. And the second addition confirmed

Income Tax Officer, Ward-1(1), Kalyan, Kalyan West vs. Awami Imadi Fund Bhiwandi, Bhiwandi

In the result, the appeal filed by the revenue is allowed for statistical purpose

ITA 5871/MUM/2024[2018]Status: DisposedITAT Mumbai06 Mar 2025

Bench: Shri. Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Income Tax Officer, Ward-1(1) Awami Imadi Fund Bhiwandi 1St Floor, Mohan Plaza, Wayale Nagar, Madrasa Arabia Miftahul Uloom, Vs. Khadakpada, Kalyan West - 421301. Bhusal Mohalla, Bhiwandi. Pan/Gir No.Aaeta0102F (Assessee) : (Respondent) Assessee By : Shri. Shakil Mohammed Ayyub Momin (Manager) Respondent By : Shri. Ram Krishn Kedia (Sr. Dr) Date Of Hearing : 04.03.2025 Date Of Pronouncement : 06.03.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short) Passed U/S. 250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2018-19. 2. The Revenue Has Raised The Following Grounds Of Appeal: A. “On The Facts & Circumstances Of The Case & In Law, The Ld. Cit(A) Failed To Appreciate That The Submissions Made By The Assessee During Appellate Proceedings Were In The Nature Of Additional Evidences & Therefore Erred In Not Allowing The A.O. To Examine The Additional Evidence Admitted By Them As Per The Provisions U/S 46A(3) Of The 1. T. Rules, 1962. B. The Appellant Prays That The Order Of The Cit(A) May Be Set Aside & That Of The Assessing Officer Be Restored. Amami Imadi Fund Bhiwandi

For Appellant: ShriFor Respondent: Shri. Ram Krishn Kedia (Sr. DR)
Section 143(2)Section 147Section 148Section 250Section 46A(3)Section 68

income at Rs. 1,18,88,310/-, after making addition u/s. 68 of the Act, amounting to Rs. 1,17,10,000/- as unexplained cash credit. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 08.09.2024, deleted the addition made by the learned

Assistant Commissioner of Income Tax, Mumbai vs. Hira Technologies Private Limited, Pune, Maharashtra

In the result, the appeal by the Revenue is dismissed

ITA 5028/MUM/2024[2016-17]Status: DisposedITAT Mumbai06 Mar 2025AY 2016-17

Bench: Shri Sandeep Singh Karhailsmt. Renu Jauhriassistant Commissioner Of Income Tax, Room No.126, 1St Floor, Aaykar Bhawan, Maharishi Karve Road, Mumbai - 400020 ……………. Appellant Maharashtra V/S Hira Technologies Private Limited Plot No.1, Part-Ii, Khed City Taluka Khed, Rajgurunagar Pune, Dta Village, ……………. Respondent Khanesar, Pune – 410505 Pan: Aabch2291N

For Appellant: Shri Sanjay SanghviFor Respondent: Ms. Neena Jeph, CIT-DR
Section 142(1)Section 143(2)Section 250Section 68

aforesaid details and made the addition under section 68 of the Act by 6 considering the share application money as unexplained cash credit, by observing as follows: – “3.3 In response to the above stated show cause letter, the assessee has submitted details on the ITBA system on 20/12/2019. The details ... addition made by the AO under section 68 of the Act by considering the share application money received by the assessee as unexplained cash credit, as the assessee has proved the identity and creditworthiness of the investors/shareholders, and the genuineness of the transaction. Accordingly, we find no infirmity

Devender Kumar, Rohtak vs. ITO, Ward 1, Rohtak

ITA 2509/DEL/2024[2012-13]Status: HeardITAT Delhi06 Mar 2025AY 2012-13

Bench: Ms. Madhumita Roy & Shri Naveen Chandraa.Y. 2015-16 A.Y. 2016-17 A.Y. 2017-18 A.Y. 2018-19 A.Y. 2019-20

amount was verifiable from record and books of account and Assessing Officer did not accept explanation and added said amount in income as unexplained cash credit, impugned addition was not justified. 44 | P a g e 45 ITA Nos. 2713-2714/Del/2023; ITA Nos. 7,51,271/Del/2024 etc. Super Cassettes

Kuber Metpack P. Ltd (Formerly Known As Kelvin Metpack P.Ltd), Delhi vs. ACIT, Central Circle-30, New Delhi

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

ITA 1409/DEL/2022[2015-16]Status: DisposedITAT Delhi06 Mar 2025AY 2015-16

Bench: Sh. Sudhir Kumar & Sh. Manish Agarwal

Section 115BSection 139(1)Section 142(1)Section 143(2)Section 143(3)Section 68

under challenge on facts and law for an addition of Rs.1,65,01,524/- by invoking the provisions of section 68 as unexplained cash credit. Even alternatively the quantum of addition is disputed. 5. Because the action is being challenged on facts and law for making addition of Rs.1 ... Assessing Officer. Thus, in my considered opinion the Assessing Officer has rightly made addition of Rs. 1,65,01,524/- on account of unexplained cash credit u/s 68 read with Section 115BBE of the LT. Act, 1961 and I do not find any reason to interfere with the order