Arti Garg Vs DCIT (ITAT Delhi)
₹2 Crore Cash Addition Deleted – WhatsApp Slip Inadmissible Without Proper Digital Evidence & Chain of Custody
The Delhi ITAT allowed the appeals of both buyer and seller and deleted the additions of ₹2 crore each made under Sections 69 and 69C on account of alleged on-money paid in a property transaction. The Tribunal held that the entire case of the Department rested on a digital image of a slip allegedly found in the mobile phone of a third-party broker, which lacked legal sanctity and could not be relied upon as admissible evidence.
The Tribunal found that although a Section 65B certificate was produced, the mandatory safeguards prescribed under the Indian Evidence Act and the CBDT Digital Evidence Manual were not followed. There was no proper chain of custody, no proof of integrity of the data, no evidence of how the image travelled from the seized device to the Assessing Officer, and no corroboration from the phones of the assessee or her husband. The certificate itself was incomplete and silent on crucial aspects such as device identity and custody trail.
Further, the assessee’s statement admitting partial cash payment had been validly retracted and was not supported by independent evidence. In absence of reliable electronic evidence, cross-examination of the alleged broker, or any corroborative material, the Tribunal held that the preponderance of probability theory could not override strict evidentiary requirements for digital records.
Accordingly, holding that the electronic evidence was inadmissible and unreliable, the Tribunal deleted the entire additions of ₹2 crore in both cases and allowed both appeals in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
