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2023 (4) TMI 99 - AT - Income TaxAddition u/s 69A in respect of unexplained money - search and seizure u/s 132 - During the course of search and seizure, mobile data was retrieved and printout of SMS were taken out from the mobile - As per the mobile messages, unaccounted cash transactions were carried out between concerns of GPT Group and others - HELD THAT - We have perused the decisions of the Co-ordinate Benches of the Tribunal and found that the ratio of law laid down is that no addition can be made on the basis of messages from SMS or WhatsApp between two persons unless there is corroborative evidences on record. In the WhatsApp messages, it was never stated that the money belonged to the assessee but it was stated to be transactions between the concerns/parties of GPT Group and others. Addition cannot be sustained as it based on the SMS or WhatsApp messages without any corroborative evidences. We are inclined to set aside the order of the CIT(A) and direct the AO to delete the addition. Appeal of the assessee is allowed.
Issues Involved:
1. Confirmation of addition of Rs. 20,00,000/- under Section 69A of the Income-tax Act, 1961 for unexplained money. Summary: Issue 1: Confirmation of addition of Rs. 20,00,000/- under Section 69A of the Income-tax Act, 1961 for unexplained money The assessee filed a return of income on 31/08/2018 declaring a total income of Rs. 58,45,250/-. A search and seizure operation under Section 132 of the Income-tax Act was conducted on 12/09/2017 on the GPT Group of cases, including the assessee. During the search, mobile data was retrieved from the mobile of Shri Atul Tantia, indicating unaccounted cash transactions between GPT Group concerns and others. The Assessing Officer added Rs. 20,00,000/- as undisclosed income under Section 68 of the Act, as the assessee did not provide a plausible explanation during the assessment framed under Section 143(3) of the Act dated 30/12/2019. Aggrieved, the assessee appealed to the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)], who confirmed the addition. The Ld. CIT(A) held that the mobile, found at the assessee's premises, was presumed to belong to the assessee under the law of evidence. The WhatsApp/SMS messages indicated instructions regarding the delivery of cash, and the assessee failed to provide evidence to the contrary. The Ld. CIT(A) concluded that the alleged unaccounted cash belonged to the assessee and upheld the addition of Rs. 20,00,000/- as undisclosed money. Upon further appeal, the Tribunal observed that the addition was based on printouts from the mobile recovered from Shri Atul Tantia, which was claimed to belong to an employee, Shri Shivratan Sharma. The WhatsApp messages discussed two entries of Rs. 10,00,000/- each, but there was no indication that the money belonged to the assessee. The Tribunal noted that the assessee consistently denied ownership of the mobile and argued that WhatsApp or SMS messages could not be treated as evidence for making additions. The Tribunal referred to several decisions, including ACIT vs. Machukonda Shyam and A. Johnkumar vs. DCIT, which held that no addition could be made based on messages from SMS or WhatsApp without corroborative evidence. The Tribunal concluded that the addition could not be sustained as it was based solely on SMS or WhatsApp messages without corroborative evidence. The Tribunal set aside the order of the Ld. CIT(A) and directed the Assessing Officer to delete the addition. In the result, the appeal of the assessee was allowed. Order pronounced in the Court on 28th March, 2023 at Kolkata.
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