Designers Point (India) P. Ltd. Vs ACIT (ITAT Delhi)
The ITAT Delhi allowed the appeal filed by Designers Point (India) P. Ltd. against the order of CIT(A)-27, New Delhi dated 22.09.2022 for A.Y. 2020-21. The Assessing Officer had made an addition of Rs.9,50,000/- under Section 69C of the Income Tax Act on account of alleged unaccounted cash salary payments to four employees. The CIT(A) deleted the amounts relating to Shri Dhananjay Singh and Ms Yamini Singh but confirmed Rs.5,75,000/- relating to Ms Seema Dutta and Mr. Aman Sheghal, relying upon their statements and WhatsApp chats. The assessee submitted that there was no corroborative evidence of cash salary payments and that cross-examination of the employees whose statements were relied upon had not been provided. The Tribunal noted that the Assessing Officer had relied only on WhatsApp chats between the employees and their statements, without any other documentary evidence or adverse positive material found during the search and seizure operation. It found no distinction between the cases of the two employees for whom the addition was deleted and those for whom it was confirmed. The Tribunal held that the WhatsApp chats on a standalone basis did not constitute valid evidence to support the Section 69C addition in the absence of other corroborative adverse material. The Assessing Officer was directed to delete the addition of Rs.5,75,000/-, and the assessee’s appeal was allowed. The order was pronounced in the open court on 06.09.2023.
Cases Discussed
- Designers Point (India) P. Ltd. Vs ACIT – ITA No. 2517/Del/2022
- Virender Singh Ratnawat – ITA No. 179-181/JP/2022
- Anvar P.V vs P.K.Basheer & Ors (2014) 10 SSC 473
FULL TEXT OF THE ORDER OF ITAT DELHI
