DCIT Vs Payal Khemka (ITAT Delhi)
Search proceedings in the Khemka Group revealed WhatsApp chats discussing a proposed property deal at A-32, Westend Colony, Delhi with a tentative price split of “76/23”. Based solely on these chats, the AO concluded that ₹23 crore represented undisclosed cash consideration paid over and above the registered value of ₹76 crore and made addition u/s 69 r.w.s. 115BBE.
However, the CIT(A) examined the entire seized material holistically—including draft agreement to sell, renovation cost estimates and a board resolution dated 10-04-2019—and held that ₹23 crore referred only to proposed refurbishment cost to be incurred by the seller, which was later abandoned when the property was purchased “as-is” for ₹76 crore. Statements of the buyer, broker and seller consistently confirmed that no cash component was involved.
The Tribunal upheld the deletion observing that:
- WhatsApp chats may raise suspicion but cannot justify addition without corroborative evidence.
- All seized documents and statements must be read together; when viewed holistically, they negated the allegation of cash payment.
- No evidence existed to prove execution of alleged cash terms or actual payment of ₹23 crore.
- The registered sale deed and board resolution supported the assessee’s explanation that the renovation proposal was dropped before purchase.
Accordingly, the addition treating ₹17.25 crore (assessee’s share) as unexplained investment was held unsustainable, and the Revenue’s appeals were dismissed while cross-objections became academic.
FULL TEXT OF THE ORDER OF ITAT DELHI
