ACIT Vs Pawan Kumar Bansal (ITAT Delhi)
Protective Additions Collapse with Substantive Case, WhatsApp Chats Can’t Tax Mere Demands: Delhi ITAT
Delhi ITAT, Delhi Benches ‘B’, in ACIT Vs Pawan Kumar Bansal (ITA Nos. 4799, 4800 & 4801/Del/2024; AYs 2017-18, 2018-19 & 2019-20; order dated 19-12-2025), dismissed all three Revenue appeals and upheld the relief granted by the Ld. CIT(A) in proceedings u/s 153C.
For AY 2017-18, the Tribunal confirmed deletion of protective addition of ₹2.40 crore u/s 69A, holding that once the substantive addition in the case of Capital Power Systems Ltd. itself stood quashed due to invalid approval u/s 153D, the protective addition in the hands of the assessee could not survive.
For AY 2018-19, the Tribunal upheld deletion of protective addition of ₹83 lakh for the same reason. It also sustained deletion of substantive additions of ₹15 lakh and ₹25 lakh, holding that WhatsApp chats merely showed demand or intimation, not actual receipt of cash. Where ₹15 lakh stood recorded as a banking transaction already taxed in the company’s hands, re-taxing it in the assessee’s hands would amount to double taxation. As regards ₹25 lakh, the Tribunal applied the real income doctrine, holding that undisclosed income cannot be taxed on accrual or demand basis without proof of actual receipt.
For AY 2019-20, the Tribunal upheld deletion of protective addition of ₹95.55 lakh as the substantive case again failed. On substantive addition of ₹20 lakh, it concurred with the CIT(A) that part of the addition involved duplication of the same WhatsApp chats, and that income already taxed in the hands of the company could not be added again in the hands of the assessee. Only ₹10 lakh, already sustained by the CIT(A) and not challenged by the assessee, remained undisturbed.
The Tribunal reiterated that protective additions automatically fall when substantive additions are set aside, that WhatsApp chats without corroboration cannot establish receipt of unaccounted income, and that the principle of real income applies equally to alleged undisclosed cash receipts. Accordingly, all Revenue appeals were dismissed in toto.
FULL TEXT OF THE ORDER OF ITAT DELHI
The Revenue filed captioned Appeals pertaining to Assessment Years 2017-18, 2018-19 and 2019-20 assailing the orders of Ld. Commissioner of Income Tax (Appeals)-23, New Delhi ,(Ld. CIT(A)’ for short), dated 31/08/2024 respectively.
