Unexplained expenditure, etc
Section 69C of the Income-tax Act, 1961 deals with unexplained expenditure, etc. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or The Act came into force on 01 Apr 1962. Repealed by the Income-tax Act, 2025 with effect from 1 April 2026, but conduct before that date is still charged, tried and appealed under it.
Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year :
Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.
Amount borrowed or repaid on hundi.
Section 69C, The Income-tax Act, 1961 (Act 43 of 1961).
Now in the Income-tax Act
INCOME-TAX-ACT-2025 105 Unexplained expenditure Official correspondence
Measured by comparing the text of the two provisions, not taken from an official correspondence table — there is no machine-readable one. See both texts side by side before relying on it.
Both regimes are live. The repealed enactment still governs what happened while it was in force. We never redirect one to the other.
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 6
- Finance Act s. 25 Amendment of section 69C
- s. 115BBD Tax on certain dividends received from foreign companies
- s. 115BBDA Tax on certain dividends received from domestic companies
- s. 115BBE Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D
- s. 158BB total undisclosed income] of block period
- s. 271AAC Penalty in respect of certain income
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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The Principal Commissioner of Income-tax – 25 v. Shree Ganesh Developers
Court's Decision & Legal Precedent
DATE-VERIFIED Judgment 05.03.2025 (order-15.pdf): Split outcome. Purchases from suppliers who answered s.133(6) with bank statements showing no cash withdrawal after assessee’s cheques — concurrent findings of genuineness upheld (Revenue appeal dismissed). For Neptune Trading / Hari Om Traders (no bank statements; assessee accepted 12.5% addition), accepting a percentage of unproved purchases implies the whole purchase is unexplained — CIT(A)/ITAT should have confirmed full addition under s.69C (capped at those parties’ totals).
On this section: Teaches s.69C evidentiary fork: bank-verified suppliers vs parties whose purchases remain unproved after acceptance of % addition.
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Pr. Commissioner of Income Tax-5, Mumbai v. Kanak Impex (India) Ltd.
Court's Decision & Legal Precedent
DATE-VERIFIED Final Order/Judgment 03.03.2025 (order-4.pdf): Bombay HC allowed Revenue’s s.260A appeal. Where the assessee failed to appear in reassessment and did not prove genuineness/source of alleged hawala purchases, estimating GP (12.5%) after finding purchases unproved wrongly implies deduction of unexplained expenditure; s.69C and its proviso bar allowing such unexplained expenditure as a deduction — AO’s 100% addition of Rs.20.06 cr restored (capped at that amount).
On this section: Teaches s.69C: unexplained expenditure on unproved/bogus purchases is deemed income and cannot be diluted to a profit-margin disallowance once onus fails.
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Principal Commissioner of Income Tax – 32, Mumbai v. Hitesh Mody (HUF)
Court's Decision & Legal Precedent
Labelled Final Order 07.02.2024 (order-7.pdf; CORAM date matches index — body is the disposed Final Order despite wrong-doc banner on embedded prior dates): Revenue’s appeal dismissed. Where AO did not doubt sales/inventory/banking payments and only disputed hawala-named suppliers, CIT(A)/ITAT could restrict s.69C addition to a fair profit margin (8%); N.K. Industries / N.K. Proteins distinguished on facts (fictitious invoices/search material vs sales-accepted trading).
On this section: Complements Kanak: s.69C does not compel 100% addition where sales and stock are accepted and only profit element of unproven purchases is in issue.
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Principal Commissioner of Income Tax, 29, Mumbai v. Jagdish Thakkar
Court's Decision & Legal Precedent
Labelled Final Order 05.08.2022 (order-7.pdf; CORAM 5 August 2022 matches index despite wrong-doc banner): Revenue appeal dismissed — no substantial question of law. Where purchases were reflected in stock, payments went through banking channels, sales/exports were accepted, and AO brought no evidence of cash recirculation, s.69C (source of expenditure unsatisfactory) was not attracted for 100% addition; concurrent CIT(A)/ITAT restriction to 10% left undisturbed (Ram Builders line).
On this section: Teaches limits of s.69C where expenditure itself is evidenced and source (banking) is explained — Sales Tax hawala tag alone is insufficient.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 69C
What have the courts held on Section 69C of the Income-tax Act?
The Principal Commissioner of Income-tax – 25 v. Shree Ganesh Developers (05 Mar 2025) is the leading judgment on this section among those set out below: Teaches s.69C evidentiary fork: bank-verified suppliers vs parties whose purchases remain unproved after acceptance of % addition. Another 3 judgments on this section are set out below. They run from 2022 to 2025.
How do I find court cases under Section 69C of the Income-tax Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Income Tax Act 69C, section 69C Income Tax Act, section 69C of the Income-tax Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with The Principal Commissioner of Income-tax – 25 v. Shree Ganesh Developers (05 Mar 2025).
What should I read with Section 69C of the Income-tax Act, and has it changed?
6 other provisions in this corpus refer back to it. For anything done on or after 1 April 2026 the provision to read is Income-tax Act, 2025, section 105 (Unexplained expenditure), which replaced it; conduct before that date is still charged, tried and appealed under this section.
When did Section 69C of the Income-tax Act come into force?
Section 69C of the Income-tax Act, cited as Income Tax Act 69C, came into force on 01 Apr 1962, having been enacted on 13 Sep 1961. It is no longer in force.
Other sections of this Act
- 10. Incomes not included in total income30885 words
- 2. Definitions11419 words
- 80HHF. Deduction in respect of profits and gains from export or transfer of film software, etc7148 words
- 80-IB. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings5474 words
- 155. Other amendments5451 words
- 139. Return of income5400 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Recovered from the consolidated text published by the Income Tax Department, as amended by the Finance Act, 2026. India Code holds no record of this Act in any form. This page is not a substitute for legal advice.