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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

Jaimin Gautam Mehta, Mumbai vs. ACIT, Circle 5(3)(2), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 7574/MUM/2025[2009-10]Status: DisposedITAT Mumbai28 Jan 2026AY 2009-10

Bench: Shri Sandeep Gosain & Shri Bijayananda Pruseth

Section 147Section 250Section 68

additions of Rs. 3,30,00,000/- comprising of the following amount, without affording proper opportunity of being heard to the assessee. a. Unexplained Cash Credits u/s. 68 Rs. 3,30,00,000/- towards Unsecured Loan taken from certain parties. The learned CIT(A) failed to acknowledge the Confirmations, Bank ... additions of Rs.7,39,37,397/- comprising of the following amount, without affording proper opportunity of being heard to the assessee. a. Unexplained Cash Credits u/s. 68 Rs.7,39,37,397/- towards Unsecured Loan taken from certain parties. The learned CIT(A) failed to acknowledge the Confirmations, Bank Statements

Jaimin Gautam Mehta, Mumbai vs. Asst. CIT Circle 5(3)(2), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 7573/MUM/2025[2008-09]Status: DisposedITAT Mumbai28 Jan 2026AY 2008-09

Bench: Shri Sandeep Gosain & Shri Bijayananda Pruseth

Section 147Section 250Section 68

additions of Rs. 3,30,00,000/- comprising of the following amount, without affording proper opportunity of being heard to the assessee. a. Unexplained Cash Credits u/s. 68 Rs. 3,30,00,000/- towards Unsecured Loan taken from certain parties. The learned CIT(A) failed to acknowledge the Confirmations, Bank ... additions of Rs.7,39,37,397/- comprising of the following amount, without affording proper opportunity of being heard to the assessee. a. Unexplained Cash Credits u/s. 68 Rs.7,39,37,397/- towards Unsecured Loan taken from certain parties. The learned CIT(A) failed to acknowledge the Confirmations, Bank Statements

Zebra Networks Private Limited, Mumbai vs. Income Tax Officer, Mumbai

In the result, the appeal is allowed for statistical purpose

ITA 7497/MUM/2025[2018-19]Status: DisposedITAT Mumbai28 Jan 2026AY 2018-19

Bench: Shri Saktijit Dey & Shri Arun Khodpiazebra Networks Private Limited Income Tax Officer Unit No.4, Peninsula Corporate Park, Assessment Unit, Peninsula Chamber, G. K. Marg, Vs. Income Tax Department, Mumbai-400 013 Mumbai – 400 020 Pan/Gir No. Aabci 6267 P (Appellant) : (Respondent) Appellant By : Shri Ketan L Vajani Respondent By : Shri Swapnil Choudhary – Sr.Ar Date Of Hearing : 28.01.2026 Date Of Pronouncement : 28.01.2026 O R D E R Per Saktijit Dey: This Is An Appeal By The Assessee Against Order Dated 19.09.2025, Passed By National Faceless Appeal Centre (‘Nfac’ For Short), Delhi For The Assessment Year (A.Y. For Short) 2018-19, Confirming The Penalty Imposed Of Rs.76,45,696/- U/S. 271Aac(1) Of The Income Tax Act, 1961 (‘The Act’ For Short).

For Appellant: Shri Ketan L VajaniFor Respondent: Shri Swapnil Choudhary – Sr.AR
Section 143(3)Section 271ASection 68

short) called for various details and after examining them completed the assessment u/s. 143(3) of the Act, making the following additions: a) Unexplained cash credit u/s. 68 of the Act – Rs.9,89,73,410/- b) Disallowance of expenses of Rs.12,64,743/- 4. Contesting the additions, the assessee preferred

Pooja Babulal Jain, Mumbai vs. ITO 23(2)(6), Mumbai

In the result, the appeal of assessee is allowed

ITA 7484/MUM/2025[2011-12]Status: DisposedITAT Mumbai28 Jan 2026AY 2011-12

Bench: Shri Pawan Singh(Physical Hearing) Pooja Babulal Jain Ito,Ward-23(2)(6), Mumbai 31, Gulalwadi, 2Nd Floor, Kika Street Vs Piramal Chambers, Above Sanjay Enterprises, Mumbai - 400012. Mumbai, Maharashtra – 400004. [Pan No. Ahnpj3980E] Appellant / Assessee Respondent / Revenue

Section 148Section 234BSection 254(1)Section 271(1)(c)Section 68Section 69C

entered in sham transaction and has erred in making addition of Rs 2,03,479/- Pooja Babulal J on the alleged ground of unexplained cash credit u/s. 68 of the Income Tax Act, 1961 and the reasons assigned for doing so are wrong and contrary to the facts ... provision of the law. 5) The Learned CIT(A) has erred in treating the sum of ₹2,03,479 as unexplained cash credit under section 68 of the Act, despite the fact that the appellant has not maintained any books of account. In the absence of books, the foundational requirement

ACIT CC 7(4), Mumbai vs. Aayush Infotech Private Limited, Mumbai

In the result, the appeal filed by the Revenue stands dismissed

ITA 5915/MUM/2025[2013-14]Status: DisposedITAT Mumbai28 Jan 2026AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI MAKARAND VASANT MAHADEOKAR (Accountant Member)

Section 132Section 133(6)Section 143(3)Section 147Section 68Section 69C

investigation inputs, the Assessing Officer called upon the assessee to explain as to why the said loan transactions should not be treated as unexplained cash credits under section 68 of the Act. The assessee was also informed that notices issued to the lender companies under section ... Officer concluded that the lender companies were accommodation entry providers. Accordingly, the unsecured loans aggregating to ₹1,57,00,000/- were treated as unexplained cash credits under section 68 of the Act. A further addition of ₹3,14,000/- was also made under section 69C of the Act towards alleged

Sudesh Dhanraj Murpana (HUF), Mumbai vs. The Income Tax Officer, Ward 23(3)(1, Mumbai

In the result, appeal of the assessee is allowed

ITA 5485/MUM/2025[2013-14]Status: DisposedITAT Mumbai28 Jan 2026AY 2013-14

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2013-14 Sudesh Dhanraj Murpana Income Tax Officer – 23(3) (1) (Huf) Matru Mandir, Tardeo, Grant 401 Somdhan Bldg, Perry Road, Cross Road Bandra (West), Vs. Mumbai - 400007 Mumbai 400050

For Appellant: Shri Mahavir Jain and Shobit MishraFor Respondent: Shri Swapnil Choudhary, Sr. DR
Section 147Section 148Section 68

tangible material' to justify the conclusion that income had escaped assessment. C. Addition of Rs. 53,27,727/- u/s 68 as unexplained cash credits 7. That in the facts and circumstances of the case and in law, the Ld. AO erred in holding that the LTCG ... disclosed are not genuine and represent unexplained cash credits in the Appellant's books of account and that he has resorted to preconceived scheme to procure LTCG, although the Appellant has submitted all the relevant documents to show that the purchase and sale of shares were genuine transactions. 8. That

Vinodkumar Ghisulal Shah(HUF), Mumbai vs. Income Tax Officer Ward 20(3)(5), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 4172/MUM/2025[2012-13]Status: DisposedITAT Mumbai28 Jan 2026AY 2012-13

Bench: Shri Sandeep Gosain & Shri Bijayananda Prusethvinod Kumar Ghisulal Shah Vs. Ito, Ward 20(3)(5), Mumbai. 2Nd (Huf). Room No.205, Floor, Piramal A-101, P2 Floor, Vijaya Chamber, Lalbaug, Parel Mumbai- Residency, Chiwda Gully, 400012. Lalbaugh, Mumbai-400012. Pan/Gir No: Aaghv3367R (Appellant) (Respondent)

Section 10(38)Section 143(3)Section 147Section 148Section 151Section 153CSection 250Section 68Section 69C

Appeals)-51has erred in sustaining addition of Rs.2,61,31,711/- to the income of the appellant under section 68 as unexplained cash credit of the Act even after providing all requisite explanations and evidences to substantiate the genuineness of the transactions undertaken. 7. In the facts and circumstances ... Accordingly, he treated the amount of Rs.2,61,31,711/- received on the impugned sale of share of Divine Multimedia (India) Ltd. as unexplained cash credit u/s 68 of the Act. He also added 3% of the above amount of Rs.7,83,951/- as unexplained expenses and added

Jagmohan Singh Bedi, Delhi vs. Income Tax Officer, Ward 70(1), Delhi

In the result, the appeals of the assessee are partly

ITA 5069/DEL/2024[2017-18]Status: DisposedITAT Delhi28 Jan 2026AY 2017-18

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 1Section 139(1)Section 147Section 148Section 69A

section 263 against assessee CIT issued a notice under section 263 and observed that alleged credit of sales ought to be treated as unexplained cash credit against name of assensee and Assessing Officer had erred in treating it as a gross turnover Whether since Commissioner had just reproduced proposal sent

Jagmohan Singh Bedi, Delhi vs. Income Tax Officer, Ward 70(1), Delhi

ITA 5068/DEL/2024[2016-17]Status: DisposedITAT Delhi28 Jan 2026AY 2016-17

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 139(1)Section 147Section 148Section 69A

section 263 against assessee CIT issued a notice under section 263 and observed that alleged credit of sales ought to be treated as unexplained cash credit against name of assensee and Assessing Officer had erred in treating it as a gross turnover - Whether since Commissioner had just reproduced proposal sent

Jagmohan Singh Bedi, Delhi vs. Income Tax Officer, Ward 70(1), Delhi

ITA 5067/DEL/2024[2015-16]Status: DisposedITAT Delhi28 Jan 2026AY 2015-16

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 139(1)Section 147Section 148Section 69A

section 263 against assessee CIT issued a notice under section 263 and observed that alleged credit of sales ought to be treated as unexplained cash credit against name of assensee and Assessing Officer had erred in treating it as a gross turnover - Whether since Commissioner had just reproduced proposal sent

ACIT, Circle-52(1), New Delhi, Delhi vs. Singhania Alu Foil Containers Manufacturing Company, New Delhi

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

ITA 2743/DEL/2024[2015-16]Status: DisposedITAT Delhi28 Jan 2026AY 2015-16

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Amit Goel, CAFor Respondent: Shri Manish Gupta, Sr.DR
Section 143(2)Section 143(3)Section 68

justified in treating the unsecured loans aggregating to Rs. 2.87 Crore raised by the appellant firm from these threeloan creditor entities, as unexplained cash credits under section 68, in the light of evidence brought on record. I find that the appellant, in the course of assessment proceedings, and appellate proceedings ... loan transactions with various companies and source of source had also been proved by assessee, impugned loan transactions could not be treated as unexplained cash credit under section 68. 7.11 On similar facts, Hon’ble Delhi High Court (“the jurisdictional High Court”) in the case

Shree Pragati Co Op Credit Society Limited, Rajkot vs. ITO, Ward-2(1)(1), Rajkot

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

ITA 693/RJT/2025[2020-21]Status: DisposedITAT Rajkot27 Jan 2026AY 2020-21

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

For Appellant: Shri Mehul Ranpura, Ld. ARFor Respondent: Shri Sanjay Pungalia Ld. CIT (DR)
Section 143(2)Section 143(3)Section 44ASection 68Section 80P

made by the AO u/s 68 of the Act, treating amounts held in various bank accounts of members and RDC Bank as unexplained cash credits, without proper verification or opportunity to explain. The addition made and confirmed is bad in law as also on facts therefore the same may kindly ... total income for the year. Further, the A.O also made addition on account of unsecured loan and investment treating it as unexplained cash credits u/s 68 of the Act. Feeling aggrieved by the order of assessment dated 22.09.2022 appellant filed appeal before CIT(A). 4. The assessee filed an appeal

Shei Rajiv Nagari Patasavnstha Marya Hitani, Gadhinglaj vs. Income Tax Officer Ward 1 Kolhapur, Kolhapur

In the result, the appeal of the assessee is dismissed

ITA 1727/PUN/2025[2019-20]Status: DisposedITAT Pune27 Jan 2026AY 2019-20

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

For Appellant: NoneFor Respondent: Smt. Indira R. Adakil
Section 143(2)Section 147Section 148Section 249(4)Section 68Section 80P(2)(a)

Assessing Officer (“AO”) of Rs.1,24,11,396/- on account of unexplained cash deposit and Rs.30,00,000/- on account of unexplained cash credits u/s 68 of the Income Tax Act, 1961 (the “Act”) being cash and time deposits with ICICI Bank and Shri Veershaiv Co-op. Bank Ltd. respectively ... vide his order dated 27.02.2024 thereby making an addition of Rs.1,24,11,396/- as unexplained cash deposit and Rs.30,00,000/- as unexplained cash credits u/s 68 of the Act and disallowed the claim of deduction u/s 80P(2)(a)(i) of the Act. On appeal

Navtech Tradelink Private Limited, Kolkata vs. ITO, Ward 2(1), Kolkata

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

ITA 2689/KOL/2025[2012-2013]Status: DisposedITAT Kolkata27 Jan 2026AY 2012-2013

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.2689/Kol/2025 Assessment Year: 2012-13 Navtech Tradelink Pvt. Ltd…………………. ……………....Appellant Lawgical Consultants, 29D, Bentinck Street, 3Rd Floor, Unit No.A, B & C, Kol-1. [Pan: Aadcn8863C] Vs. Ito, Ward-2(1), Kolkata….…..……………..………………….…..... Respondent Appearances By: Shri Ankit Jalan, Ar, Appeared On Behalf Of The Appellant. Shri Guru Bhashyam, Cit, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 22, 2026 Date Of Pronouncing The Order : January 27, 2026 आदेश / Order Per Sonjoy Sarma: The Present Appeal Filed By The Assessee Is Directed Against The Order Dated 18.09.2025 Passed By The Nfac, Delhi U/S 250 Of The Income Tax Act, 1961 (The ‘Act’) For The Assessment Year 2012-13. 2. Brief Facts Of The Case Are That The Assessee Is A Company & Is Involved In The Business Of Investment In Shares. The Assessee Had E- Filed Its Return Of Income For The A.Y. 2012-13 On 24.9.2012 Declaring An Income Of Rs.9226/-. The Case Was Selected For Scrutiny Under Cass. After Issuing The Statutory Notices, The Assessment Was Completed By Making Addition/Disallowance On The Two Issues I.E. (I)Unexplained Cash Credit U/S 68 & (Ii) Disallowance U/S 14A/Rule 8D.

Section 14ASection 250Section 68

selected for scrutiny under CASS. After issuing the statutory notices, the assessment was completed by making addition/disallowance on the two issues i.e. (i)Unexplained cash credit u/s 68 & (ii) Disallowance u/s 14A/Rule 8D. I.T.A. No.2689/Kol/2025 Navtech Tradelink Pvt. Ltd 3. Aggrieved by the assessment order, the assessee preferred an appeal

Mohanlal Jawanlal Sakaria, Mumbai vs. DCIT Circle 20(1), Mumbai

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

ITA 7277/MUM/2025[2014-15]Status: DisposedITAT Mumbai27 Jan 2026AY 2014-15

Bench: Shri Vikram Singh Yadav, Am & Ms. Kavitha Rajagopal, Jm Mr. Mohanlal Jawanlal Sakaria, Dcit Circle 20(1), 52-62 Varjivan Mansion Princess Street, Piramal Chamber, Kalabadevi Road Mumbai, Vs. Mumbai – 400 013 Mumbai – 400 002

For Respondent: Shri Annavaram Kosuri, Sr. AR
Section 10(38)Section 147Section 148Section 250Section 271(1)(c)Section 68

retuned income by Mr. Mohanlal Jawanlal Sakaria rejecting exemption claimed u/s 10(38) of the IT Act on sale of shares as unexplained cash credit u/s 68 of the IT Act 1961 and the reason assigned for doing so are wrong and contrary to the provisions ... dated 28.03.2022 determining total income at Rs.1,77,17,308/- after making an addition/disallowance u/s 68 r.w.s. 115BBE of the Act as unexplained cash credit amounting to Rs.1,56,79,138/-. 6. Aggrieved, the assessee was in appeal before the first appellate authority who vide order dated 08.01.2025 dismissed

Ranjanben Chunilal Gada, Mumbai vs. Tio 34(3)(2), Mumbai

Appeal of the assessee is allowed

ITA 5842/MUM/2025[2014-15]Status: DisposedITAT Mumbai27 Jan 2026AY 2014-15

Bench: Shri Anikesh Banerjee

For Respondent: Shri Umashankar Prasad, (CIT DR)
Section 147Section 148ASection 246ASection 250Section 69ASection 69C

Priti Nilesh Jain Daga bank account. In view thereof, the Commissioner (Appeals) found there was no reason to add the capital gains as unexplained cash credit under section 68. The Tribunal while dismissing the appeals filed by the revenue also observed on facts that these shares were purchased by respondent

Income Tax Officer, Delhi vs. Indo Spirits, Delhi

Appeal is partly allowed

ITA 3344/DEL/2025[2022-23]Status: DisposedITAT Delhi27 Jan 2026AY 2022-23
Section 143(3)Section 68

seeks to reverse the CIT(A)/NFAC’s lower appellate discussion holding the assessment findings adding the amount of Rs.33,77,88,969/- unexplained cash credits under section 68 r.w.s. 115BBE of the Act. 4. The Revenue vehemently argues that the Assessing Officer had rightly treated the assessee’s impugned

Emerald Gems Private Limited, Surat vs. Income Tax Officer, Ward 1(1)(2), Surat

In the result, the appeal of the assessee is allowed

ITA 956/SRT/2025[2017-18]Status: HeardITAT Surat23 Jan 2026AY 2017-18

Bench: Dr. B.R.R. Kumar, Vice-Ms. Suchitra Kamble

Section 115BSection 145Section 250Section 68

erred in confirming the action of Assessing Officer in making addition of Rs. 35,25,000/- on account of alleged unexplained cash credit u/s.68 of the IT Act, 1961. 2. On the facts and circumstances of the case as well as law on the subject, the learned Assessing Officer ... period, the assessee deposited cash aggregating to Rs.35,25,000/- in its bank accounts. The Assessing Officer treated the said cash deposits as unexplained cash credits u/s 68, holding that the assessee failed to establish identity, creditworthiness and genuineness, and taxed the same u/s 115BBE

Pragjibhai Parshotambhai Patel, Na vs. Arivs.Income Tax Officer, Ward-4, Navsari

In the result, the appeal of the assessee is allowed

ITA 858/SRT/2024[2014-15]Status: HeardITAT Surat23 Jan 2026AY 2014-15

Bench: Dr. B.R.R. Kumar, Vice-Ms. Suchitra Kamble

Section 250Section 44ASection 50C

addition of Rs.10,00,000/- on account of alleged difference in opening cash balance, (ii) addition of Rs.6,58,538/- treated as unexplained cash credit received from sundry debtors, and (iii) addition of Rs.2,08,293/- made by invoking section 50C/43CA of the Act. Pragjibhai Parshotambhai Patel Vs. ITO Asst ... Rs.10,00,000/- is unsustainable and is directed to be deleted. 6. With regard to the addition of Rs.6,58,538/- treated as unexplained cash credit, we observe that the amount represents recovery from sundry debtors arising out of business transactions. It was submitted that these amounts also form part

Mirador Construction Private Limited, Mumbai vs. Circle 14(1)(1), Mumbai, Deputy Commissioner of Income Tax, Aayakar Bhawan

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

ITA 7259/MUM/2025[2017-18]Status: DisposedITAT Mumbai23 Jan 2026AY 2017-18

Bench: Shri Vikram Singh Yadav & Shri Rahul Chaudharymirador Construction Vs. Deputy Commissioner Of Income Tax, Private Limited, Circle 14(1)(1), 212, E Wing, Marathon Maharshi Karwe Road, Monte Plaza, New Marine Lines, Churchgate, Mulund West, Mumbai-400020. Mumbai-400080. Pan/Gir No:Aajcm4936H (Appellant) (Respondent)

Section 138Section 143(3)Section 263Section 68

vide order dated 27.12.2019, wherein the Assessing officer brought to tax a sum of Rs. 1,53,00,000/- as unexplained cash credit u/s. 68 of the Act for the reason that the assessee has failed to discharge ITA No.7259/MUM/2025/AY 2017-18 Mirador Construction Private Limited the necessary onus