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

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Section 69A unexplained money

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

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied