A. Johnkumar Vs DCIT (ITAT Chennai)
WhatsApp messages cannot be considered as a conclusive evidence to draw an adverse inference against the assessee, unless those WhatsApp messages are supported by corroborative evidences to indicate that those messages and contents represents undisclosed income of the assessee.
In a recent decision by the Income Tax Appellate Tribunal (ITAT) Mumbai, the case of ACIT vs Prashant Prakash Nilawar revolves around the addition of Rs. 17 crores under Section 69C of the Income Tax Act. The Assessing Officer (AO) had alleged that the taxpayer, Prashant Prakash Nilawar, distributed cash during elections based on WhatsApp messages and seized photo identity cards. However, ITAT Mumbai found the addition unjustified due to lack of corroborative evidence and improper interpretation of WhatsApp messages.
The controversy began with a search operation where photo identity cards issued by M/s. Johnkumar Trust were found at the taxpayer’s premises. The AO inferred that these cards were linked to cash distribution to voters in the Nellithope Constituency election. Additionally, WhatsApp messages retrieved from the taxpayer’s phone were interpreted by the AO as evidence of code words indicating cash transactions for votes.
The ITAT Mumbai scrutinized these claims, highlighting that WhatsApp messages alone cannot substantiate undisclosed income without further evidence. The tribunal noted that the AO’s interpretation of the messages, such as equating “tonnes” to cash amounts, lacked a factual basis and did not prove any financial transactions. Moreover, the tribunal emphasized that the taxpayer was not a candidate in the Nellithope election, further undermining the AO’s assumption of election-related expenditures.
Judicial precedents cited during the appeal emphasized that additions under Section 69C require concrete evidence and cannot rely solely on unverified documents or subjective interpretations. The tribunal underscored that the Election Commission had not reported any malpractices during the election, further weakening the AO’s case.
Summary of Judicial Precedents Discussed:
