Mansur Mehta Vs DCIT (ITAT Mumbai)
A WhatsApp Chat Is a Clue, Not a Cash Book—ITAT Orders Transaction-Wise Verification Before ss.69A/69C Additions
The controversy
A search u/s 132 was conducted on 30 September 2021 in cases connected with the Rajiv Saxena Group, during which an iPhone belonging to Mr. Mansur Abubaker Mehta was found and cloned.
The extracted data contained WhatsApp chats and e-mails referring to various amounts allegedly received or paid in cash. Based principally on those conversations, additions running into several crores were made u/s 69A as unexplained money & u/s 69C as unexplained expenditure for AYs 2016-17 to 2022-23.
The assessee was engaged in hospitality and logistics through several group entities. He explained that the conversations concerned funds held as “Amaanat,” banking transactions, group-company dealings, charitable activities, assistance to relatives & transactions between third parties where he acted merely as an introducer, facilitator or coordinator.
Both the assessee & Revenue appealed against the CIT(A)’s transaction-wise relief and application of the peak-cash method.
Numbers in chats were treated as lakhs or crores
The assessee contended that expressions such as “15,” “25,” “35,” “50K” & “100K” had been interpreted by the AO as rupees in lakhs or crores without corroboration.
