ACIT Vs Anuradha Shivkumar Gogia (ITAT Ahmedabad)
ITAT Ahmedabad held that addition made on the basis of third-party WhatsApp chat without any incriminating material is unsustainable in law. Accordingly, order of CIT(A) upheld and appeal of revenue is dismissed.
Facts- On the basis of search operation on the Gogia Group, AO made multiple addition towards undisclosed investment on account of alleged on-money payments in various real estate projects, including the Nana Chiloda Project, the Stellar Project, and Sumel Business Park; addition on account of alleged under-invoicing of sales; disallowance of exemption claimed on Long Term Capital Gains u/s. 10(38) of the Act, treating the underlying shares as “penny stocks”; and addition on account of alleged on-money received on the sale of property in the Earth Erita project. These additions were made based on material allegedly found during the search action, including digital data like WhatsApp chats retrieved from third-party mobile phones, digital images and loose notings found in the premises of other persons or concerns, as well as inferences drawn by the AO based on such material.
CIT(A) deleted majority of additions. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- Held that that in the absence of any incriminating material found during the course of search Action, no addition can be made in an unabated/ completed assessment year. The assessment year is unabated. The material relied upon is a third-party WhatsApp chat found from a person unrelated to the assessee. The chat is post-facto to the transaction. No corroborative evidence was found. In view of the law laid down by the Hon’ble Supreme Court in the case of case of Abhisar Buildwell, we hold that the impugned addition is unsustainable legally as well as factually on merits. CIT(A )was fully justified in deleting the impugned addition. We uphold his order. The Revenue’s appeals on this issue are dismissed. Our above findings will mutatis mutandis apply to all the five appeals mentioned in the chart above.
