Sandeep Aggarwal Vs DCIT (ITAT Delhi)
Summary: The Delhi ITAT deleted the addition made under Section 69A on account of alleged unexplained jewellery purchases based solely on WhatsApp chats recovered during a search conducted in the case of the Pilot Industries Group. The Assessing Officer had treated certain WhatsApp conversations between the assessee, his wife, and jewellers as evidence of cash purchases of jewellery aggregating to ₹82.10 lakh and made additions under Section 69A. The CIT(A) partly confirmed the addition to the extent of ₹31.70 lakh after interpreting some chats as indicating actual cash payments. However, the Tribunal held that no excess or undisclosed jewellery was found during the search, no invoices, bills, estimates, or payment evidence were discovered, and all jewellery found stood fully reconciled with disclosed records. It further noted that the jewellers named in the chats denied any sale transactions with the assessee. The ITAT held that WhatsApp chats alone merely create suspicion and cannot establish ownership or actual acquisition of undisclosed jewellery required under Section 69A. Since Section 69A is a deeming provision requiring strict interpretation, the Tribunal deleted the entire addition.
Core Issue. The principal issue before the Tribunal was whether WhatsApp chats recovered from the mobile phones of the assessee and his wife could, by themselves, constitute sufficient evidence to invoke section 69A and justify an addition for alleged unexplained investment in jewellery.
