No Addition Based on Unsubstantiated WhatsApp Conversation Between Employees

Designers Point (India) P. Ltd Vs ACIT (ITAT Delhi)

Introduction: The case of Designers Point (India) P. Ltd vs. ACIT (ITAT Delhi) revolves around a contentious issue of income tax addition made under section 69C of the Income Tax Act. This addition was solely based on WhatsApp chats and statements of employees regarding alleged cash payments.

Detailed Analysis:

1. Assessment and Appeals: The appeal was filed against the order of CIT(A)-27, New Delhi, dated 22.09.2022, for the Assessment Year 2020-21. The primary issue raised by the assessee was the validity of the addition of Rs. 5,75,000 made under section 69C.

2. Basis of Addition: The addition was made on the basis of WhatsApp conversations between two employees and statements recorded from them. The assessee argued that WhatsApp chats have no evidentiary value, and the statements were not corroborated with substantial evidence.

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