No Section 69A Addition Based Solely on WhatsApp Chat | ITAT

Case Details: Rucha Consultancy LLP vs. DCIT, Central Circle-6(1) - [2025] 174 taxmann.com 221 (Mumbai - Trib.)[07-04-2025]

Judiciary and Counsel Details

• Anikesh Banerjee, Judicial Member & B.R. Bhaskaran, Accountant Member
• Nishit Gandhi, Ms Aadnya Bhandari for the Assessee.
• Smt. Sanyogita Nagpal, CIT-DR for the Revenue.

Facts of the Case

During the search operation, the Assessing Officer (AO) made additions based on the statement of a third-party consultant. The consultant accepted having received a certain amount in cash during the search. The AO treated said amount as unexplained money received on behalf of the assessee and made additions under section 69A.On appeal, the CIT(A) deleted the additions.

ITAT Held

The Mumbai Tribunal upheld the CIT(A)’s decision and held that the AO made additions based on a third-party statement without bringing any corroborative material to support his view that the impugned amount was received on behalf of the assessee. The AO made this addition based on a WhatsApp chat and the statement given by the third-party consultant.

The CIT(A) noticed that the AO’s presumption that the third-party consultant was an employee of the assessee was not correct. He stated that the consultant was an independent consultant and not an employee. Hence, the foundation on which the AO made the additions fails here.

Further, the CIT(A) stated that the WhatsApp chat did not mention the assessee, and the third-party consultant also did not mention the assessee’s name.

Accordingly, he held that the WhatsApp chat did not affect the assessee, and hence, no additions could be made.

List of Cases Reviewed

• Common Cause v. UOI (2017) (77 taxmann.com 245 ) (SC) (para 6.9) followed
• ITA No.5024/Mum/2024, dated 17-2-2025 (para 9.5) followed

List of Cases Referred to

• Common Cause (A Registered Society) v. Union of India [2017] 77 taxmann.com 245/245 Taxman 214/394 ITR 220 (SC) (para 6.9)
• Pr. CIT (Central) v. Dwarka Prasad Aggarwal [2024] 161 taxmann.com 813/299 Taxman 363 (SC) (para 12.2)
• Kailashben Manharlal Chokshi v. CIT 328 ITR 411 (para 12.2)
• Dy. CIT v. Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat) (para 12.2)
• CIT v. Sant Lal [2020] 118 taxmann.com 432/273 Taxman 551/423 ITR 1 (Delhi) (para 12.2)
• Jawaharbhai Atmaram Hathiwala v. ITO [2010] 128 TTJ 36 (Ahmedabad – ITAT) (para 12.2)
• Asstt. CIT v. Prabhat Oil Mills [1995] 52 TTJ 533 (Ahmedabad – ITAT) (para 12.2)
• Shell Information Technology International BV v. Dy. CIT (International Taxation) [2023] 147 taxmann.com 124 (Mumbai – Trib.) (para 12.2).