Section 69C of the Income Tax Act

Income-tax Act, 2025: s.105

Section 69C of the Income-tax Act, 1961 corresponds to section 105 (Unexplained expenditure) of the Income-tax Act, 2025.

Read section 105 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 69C is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 of the 8,217 judgments on BharatTax that turn on this section.

Leading authorities on Section 69C

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. Durga Prasad More
82 ITR 540 · 1971 · Supreme Court
1,579
citing judgments

Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.

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.

Kishanchand Chellaram v. CIT
125 ITR 713 · 1980 · Supreme Court
962
citing judgments

An assessee is entitled to be confronted with evidence used against them and to an opportunity for cross-examination, especially when that evidence is from a third party or a retracted statement. Failure to provide such an opportunity violates the principles of natural justice.

McDowell & Co. Ltd. v. CTO
154 ITR 148 · 1985 · Supreme Court
741
citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

(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.

Umacharan Shaw & Bros. v. CIT
37 ITR 271 · 1959 · Supreme Court
567
citing judgments

An income tax assessment or addition cannot be sustained solely on the basis of suspicion, surmises, or conjectures, as strong suspicion does not amount to proof. The revenue authorities must rely on concrete evidence and material to frame an assessment.

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.

Parashuram Pottery Works Co. Ltd. v. ITO
106 ITR 1 · 1977 · Supreme Court
486
citing judgments

The principle of finality dictates that stale issues should not be reactivated, and lapse of time brings repose to judicial and quasi-judicial controversies. A Commissioner cannot substitute their judgment for the Assessing Officer's unless the assessment order is legally erroneous, not merely less elaborate, thus limiting revisionary powers under Section 263.

Judgments on Section 69C

ACIT, Anand Circle, Anand vs. Narendrakumar Hansrajbhai Patel, Kheda

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

ITA 834/AHD/2024[2021-22]Status: DisposedITAT Ahmedabad29 Oct 2025AY 2021-22

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinhaआयकर अपील सं /Ita No.834/Ahd/2024 िनधा"रण वष" /Assessment Year : 2021-22 The Acit Narendrakumar Hansrajbhai बनाम/ Dy./Asst.Commissioner Of Patel V/S. Income Tax (Anand Circle) I C/O. Mahakali Saw Mill Anand – 388 001 Mansarovar Marker Kamla Kamia, Kheda – 387 320 "थायी लेखा सं./Pan: Cmmpp 6784 N (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri Mishal Mehta, Ca Revenue By : Shri Alpesh Parmar, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 28/08/2025 घोषणा की तारीख /Date Of Pronouncement: 29/10/2025 आदेश/O R D E R Per Siddhartha Nautiyal, Jm: The Present Appeal Has Been Preferred By The Revenue Against The Order Of The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As ‘Cit(A)’] Dated 27/02/2024 Passed U/S.250 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) For The Assessment Year (Ay) 2021-2022. 2. The Revenue Has Raised The Following Grounds Of Appeal: “1. Whether, On Facts & In Circumstances Of The Case & In Law, The Ld.Cit(A) Is Justified In Deleting The Addition Of Rs. 10,64,04,151/-Made U/S 69C Of The Act Without Appreciating The Fact The Assessee Failed To Substantiate The Expenditure Claimed With Supporting Evidences? Asst.Cit Vs. Narendrakumar Hansrajbhai Patel Asst. Year : 2021-22

For Appellant: Shri Mishal Mehta, CAFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 133(6)Section 143(3)Section 250Section 69C

Shahnawaz Ahmed Chaudhary, Delhi vs. ITO, Ward 58(2), Delhi

The appeal is allowed for statistical purposes

ITA 2773/DEL/2024[2017-18]Status: DisposedITAT Delhi29 Oct 2025AY 2017-18

Bench: Shri Anubhav Sharma & Shri Naveen Chandraassessment Year: 2017-18 Shahnawaz Ahmed Chaudhary, Vs Ito, 162-J-Extension, Ward-58(2), Gali No.5, New Delhi Laxmi Nagar, Delhi – 110 092. Pan: Agmpc8667K (Appellants) (Respondents) Assessee By : Shri Sandeep Manaktala, Ca Revenue By : Shri Sushil Kumar Kulheri, Sr. Dr Date Of Hearing : 29.09.2025 Date Of Pronouncement : 29.10.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 31.03.2024 Of The Commissioner Of Income-Tax (Appeals), Nfac, Delhi (Hereinafter Referred As Ld. First Appellate Authority Or In Short Ld. ‘Faa’) In Appeal No.Cit (A), Delhi-19/10373/2019-20 Arising Out Of The Appeal Before It Against The Order Dated 07.12.2019 Passed U/S 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred As ‘The Act’) By The Ito, Ward-58(2), Delhi (Hereinafter Referred To As The Ld. Ao). 2. On Hearing Both The Sides, We Find That Additions U/S 69C Of The Act Were Made On Account Of Unexplained Source Of Funds Utilized To Make Payment Of Credit Card Bills. However, The Assessee Was Unable To File Relevant Evidences To Corroborate Submissions Made Before The Ao That These Payments Were Made By The Customers/Clients Directly Towards His Credit Card Bills & The Ld. Counsel Byway Of Certain Evidences, Now Made Available In The Paper Book, Drew Our Attention To The Fact That The Sources Are Completely Disclosed & Well Explained. However, Neither The Same Were Filed Before The Ld.Cit(A) Nor Before Us As Additional Evidences. 3, Thus, For Ends Of Justice, The Assessee Is Given An Opportunity To File The Additional Evidences Before The Ld.Cit(A) Which Shall Be Considered For Admission In Accordance With The Law And, There Upon, The Appeal Be Decided Afresh By The Ld.Cit(A). Accordingly, The Appeal Is Allowed For Statistical Purposes.

For Appellant: Shri Sandeep Manaktala, CAFor Respondent: Shri Sushil Kumar Kulheri, Sr. DR
Section 143(3)Section 69C