Case Law Details
DCIT Vs Udit Jain (ITAT Delhi)
ITAT Delhi dismissed the Revenue’s appeal for AY 2023-24 in Udit Jain, affirming CIT(A)’s deletion of a hefty ₹1.30 crore addition u/s 69A r.w.s. 115BBE, which was made solely on the basis of WhatsApp chats allegedly indicating receipt of sale proceeds of a Dubai property.
The Tribunal recorded that a search u/s 132 yielded no recovery of cash, foreign currency, jewellery or any valuable article from the assessee. The entire addition rested on uncorroborated WhatsApp conversations extracted from the assessee’s mobile phone. Crucially, the Dubai property was owned by a third-party entity (San & San International DMCC), whose sole shareholder was someone else; no document, title, control, beneficial ownership or receipt of money by the assessee was ever established.
Upholding CIT(A), the Tribunal reiterated the core jurisdictional requirement of s.69A: the assessee must be found to be the owner of money. In the absence of physical possession or recovery, and without any live nexus or cash trail, WhatsApp chats—even if contemporary—remain “dumb, non-speaking documents”. The Revenue’s attempt to invoke CIT v. Daya Chand was rejected as misplaced; ownership cannot be presumed merely from digital messages or alleged influence.
The Bench emphasized that digital chats, without independent corroboration, cannot substitute proof of ownership or receipt. Since s.69A itself failed, the punitive rate u/s 115BBE automatically fell.
Result:
– Revenue appeal dismissed
– ₹1.30 crore addition u/s 69A deleted in full
– 115BBE held inapplicable
Key takeaway: No cash found, no ownership proved—WhatsApp chats alone cannot trigger s.69A. Suspicion, however detailed, is not evidence
FULL TEXT OF THE ORDER OF ITAT DELHI
The instant Revenue’s appeal is directed against the order dated 24.06.2025 [DIN: ITBA/APL/S/250/2025-26/1077715893(1)], passed by the Commissioner of Income Tax (Appeals)-23, Delhi, arising out of the order dated 20.05.2024 passed by the ACIT, Central Circle-3, Delhi, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for Assessment Year 2023-24.
2. The Revenue has raised the following grounds of appeal for adjudication:-
“1. That on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1,30,90,415/-made by the Assessing Officer under section 69Ar.w.s. 1158BE of the Income-tax Act, 1961, ignoring the fact that the assessee failed to provide a satisfactory explanation regarding the source and receipt of such income.
2. The Ld. CIT(A) erred in holding that WhatsApp chat messages found during the course of search are “dumb documents” and cannot form the basis of addition under Section 69A, despite the said messages clearly establishing a pattern of financial dealings and unaccounted cash receipt by the assessee in F.Y. 2022-23.
3. The Ld. CIT(A) failed to appreciate that the WhatsApp chats were contemporary, specifically pertained to the sale of immovable property in Dubai, and clearly indicated receipt of AED 6,30,392 (Rs. 1,30,90,415) by the assessee which was never disclosed in his return of income.
4. The Ld. CIT(A) has erred in law and on facts in holding that Section 69A is inapplicable in the absence of physical recovery of cash or property, whereas the law only requires proof of ownership and unexplained nature of the asset, which was established based on digital evidence and statements. Reliance is placed on the following decision of Hon’ble Delhi High Court:
“CIT v. Daya Chand (2001) 250 ITR 327 (Delhi HC)
Held that it is sufficient if the assessee if the assessee is found to be the owner, even if the asset is not physically recovered.”
5. The order of the Ld. CIT(A) is contrary to the facts of the case and principles of natural justice, and therefore, it is recommended that an appeal be filed before the Hon’ble ITAT.
6. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”
3. Facts of the case, in brief, are that a search & seizure operation action under Section 132 of the Act was carried out in the case of Rajdhani Group on 21.01.2023. The appellant assessee is one of the persons covered under search action. The AO in the absence of satisfactory explanation of the nature and source of cash received of Rs. 1,30,90,415/- (AED 6,30,392) by the assessee added the same on account of unexplained money under Section 69A of the Act in the hands of the assessee. In appeal, the Ld. CIT(A) by and under the impugned order dated 24.06.2025 deleted the addition, inter alia, by observing as under:
“10. In the present case, a search and seizure operation was conducted at the premises of the Appellant on 21.01.2023 under Section 132 of the Act, during which the Appellant’s mobile phone (Samsung Galaxy S22, 256GB) was seized. The basis of the impugned addition stems from certain WhatsApp chats retrieved from the said device. It is pertinent to note that no cash, foreign currency, or unaccounted assets were recovered from the possession or premises of the Appellant during the course of search, which is pre requisite condition for applicability of section 69A of the Act.
11. As per appellant the AO has, based on selected portions of WhatsApp conversations, alleged that the sale proceeds of a property located in Dubai held by “M/s. San and San International DMCC (SSID) were routed through intermediaries and ultimately received by the Appellant in cash. However, this assertion is entirely unsubstantiated and fails to withstand legal scrutiny, as the communications in question, read holistically, reveal no such conclusive inference and largely pertain to routine business interactions and personal correspondence.
12. In order to adjudicate upon the veracity of the addition made, this office called for a remand report from the AO to ascertain whether any credible documentary evidence exists which could establish that the alleged property situated in Dubai was in fact owned by the Appellant. However, in response, the AO vide remand report dated 28.05.2025 has merely reiterated the reliance on certain WhatsApp chat extracts, which remain uncorroborated and devoid of any evidentiary support.
13. It is an admitted and unrebutted fact that the subject property was legally owned by SSID, whose sole shareholder was Mr. Anand Maheshwari. The sale of the said property was executed by SSID to a third-party purchaser, Mr. Dharmendra Mutha and the same is evident from the perusal of party details, the screenshot of which is reproduced by the AO on page 28 of the assessment order.
14. The attempt to establish a connection between the Appellant and the transaction through the employment of Mr. Rajendra Maheshwari (father of Mr. Anand Maheshwari) with M/s Victoria Foods Private Limited (VFPL) is wholly tenuous and inconsequential. Such remote and incidental association, without any corroborative material, cannot be relied upon to attribute ownership or receipt of income to the Appellant under charging provisions of Section 69A of the Act since there is no material brought on record by the AO which proves that the Appellant was the owner or recipient of the alleged cash amounting to AED 6,30,392 (Rs. 1,30,90,415/-).
15. The argument of appellant that not a single piece of evidence found during the course of search proceedings which can indicate ownership of the appellant on the said property. The gist of arguments is as under:-
a. No purchase or sale deed of the subjected property in the name of appellant.
b. No utility bill of the subjected property in the name of appellant.
c. No document or evidences which show that appellant was in possession or direct or indirect control over the subject property or control over the entity i.e. SSID
d. No adverse report from Ministry of Economy, Dubai in respect to reference made to the tax Authority of Dubai by the Ld. AO.
e. No statement elther from SSID or the buyer Shri Dharmender Mutha confirming that property belonged to the assessee or any money was paid to the assessee.
f. The entire whatsapp conversation was in respect to export business of M/s. Victoria Food Pvt. Ltd. (VFPL) situated at Dubal. Without prejudice, if such alleged transactions are to be considered they can be considered in the hands of M/s. VFPL. The entire suspicion of AO arose as Mr. Anand, sole proprietor of SSID was running an agro-commodity business in Dubai and also functioning as distributor of VFPL in Dubai.
16. The arguments of appellant are fact based and the AO has failed to establish any direct, proximate, or legal nexus between the Appellant and the said transaction, nor has any evidence been brought on record to demonstrate that the Appellant had any ownership interest or received any part of the sale consideration during assessment proceedings or in remand proceedings.
17. In this regard, the provisions of section 69A is reproduced as under:-
“69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [Assessing) Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.
18. Thus, the primary condition for invoking the provisions of section 69A is that;
1. The assessee should be found to be owner of any money.
2. Such money is not recorded in the books of accounts.
3. The assessee does not offer any explanation about the nature or source of acquisition of money.
4. The explanation is not a plausible explanation.
5. Such unaccounted money can be treated as deemed income for the year.
19. Thus, this section is basically to tax any money found from the possession of the assessee at the time of search. The use of word ‘owner’ and ‘acquisition’ in the section 69A makes it clear that there should be some element of physical ownership. Similarly, the use of the word ‘acquisition’ after owner clarifies that ownership has to be physical. The section typically construes a situation wherein some money, bullion, jewellery or other valuable article are found from the possession of the assessee.
20. However, in this case, no money has been found from the possession of the appellant, the use of the word the nature and source of acquisition of the money, clarifies that the assessee should be found to be the owner of such money and he has to explain the source of acquisition of such money. As no money has been found from the possession of the appellant, therefore, the Assessing Officer was not correct in invoking the provisions of section 69A of the Act.
21. Had the intention of the law was to include, notings in the diary, then in that case there would have been the word documents alongwith money, bullion, jewllery etc. in section 69A also as is found in section 271AAA wherein undisclosed income has been defined. In section 271AAA, the word undisclosed income is defined as under-
(a)”undisclosed income” means
(1) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has-
(A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year, or
(B) otherwise not been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner before the date of search; or
(ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted;
22. Thus, by not including the word other document in the section 69A, the intention of the legislature is clear. It means that the notings in any other document will not take the character of unexplained money as per section 69A.
23. It is not a case wherein any money or jewellery or other valuable articles was seized from the possession of the appellant. Had that been the case, the action of the Assessing Officer in invoking provisions of section 69A was justified. But that is not the case,
24. Hon’ble Punjab and Haryana High Court in the case of CIT vs Ravi Kumar reported in 294 ITR 78 had an occasion to deal with the similar case. The brief fact is as under:
“The assessee was a jeweller. During a search carried out at his premises, certain gold omaments, cash and five slips/loose papers containing some calculations written in assessee’s hand writing were found and seized. The assessee surrendered certain sum for tax on account of the unexplained cash and jewellery. The Assessing Officer completed the assessment by applying the provisions of section 69A and including the amount appearing on the said loose slips. On appeal, the Commissioner (Appeals) upheld the additions. However, on second appeal, the Tribunal deleted the additions, holding that the assessee had discharged the onus by explaining that slips contained the rough calculations and it was for the revenue to prove that the same represented the transaction of sale of stock-in-hand.”
25. Based on such facts, the Hon’ble High Court has held as under:-
7. A Division Bench of the Calcutta High Court in Kantilal Chandulal & Co. v. CIT [1982] 136 ITR 889 while interpreting the provisions of section 69A of the Act had laid down that two conditions need to be fulfilled before the provisions of section 69A are applied. The first condition for applying the provisions of section 69A is that the assessee should be found to be owner of any money, bullion, jewellery or other valuable article and, secondly, the same should not be found recorded in the books of account, if any, maintained by him.
8. in the present case, the assessee was found to be in possession of loose slips and not of any valuable articles or things. Neither the possession nor the ownership of any jewellery mentioned in the slips could prove. In view thereof, the provisions of section 69A of the Act had rightly not been applied by the Tribunal to the facts of the case in hand. Accordingly, question No. 1 is answered against the revenue and in favour of the assessee.”
27. The above decision clarifies the applicability of section 69A of the Act. Therefore, the action of the Assessing Officer in making addition u/s 69A is unjustified. As the provisions of section 69A cannot be invoked in the case of the appellant, therefore, taxing the unaccounted income u/s 115BBE is unjustified.
28. Further, the impugned addition is solely predicated on WhatsApp chats retrieved from the mobile device of the Appellant, However, these chats are:
Uncorroborated by any banking or cash trall;
Do not establish that the Appellant received any money in cash or through banking channels TAK DER
Lack any explicit mention of the Appellant as recipient or owner of any funds.
28. It is a settled position in law that WhatsApp chats, unless corroborated by independent evidence, are non-speaking, dumb documents, and cannot be the sole basis of an addition. Appellant relied on the following authorities vide his submissions dated 21.04.2025:
CIT v. Girish Chaudhary [2008] 296 ITR 619 (Del);
A. Johnkumar v. DCIT [ITA No. 3028/Chny/2019];
Designers Point (India) P. Ltd. v. ACIT [ITA No.
2517/Del/2022];
Vineet Gupta v. ACIT[ITA No. 1515/Del/2023];
Virendra Singh Ratnawat v. ACIT [ITA Nos. 179-181/JP/2022].
29. These precedents reaffirm that additions cannot be sustained merely on the basis of figures or vague statements in electronic chats, without real-time corroboration or actual recovery of unexplained assets.
30. The appellant stated that despite the conduct of a full-fledged search and seizure operation under Section 132 of the Act on 21.01.2023, no cash or foreign currency was recovered from the premises of the Appellant, this fact completely demolishes the hypothesis that the Appellant received unaccounted cash on sale of the alleged Dubai property.
31. The Appellant relied on the following authority of the Ld. Jaipur ITAT in case of Virendra Singh Ratnawat v. ACIT., ITA Nos. 179 to 181/JP/2022:
“10…. The Id. AO contended that in the chat message the recipient confirmed to have that transaction saying “ok dear” based on that id. AO considered as unexplained money. In fact, the assessee in the search was not found any of the foreign currency or alleged cash in Indian rupee therefore, adding the same in hands of the assessee as unexplained cash is not only incorrect and but duplicate. Even at the time of search neither foreign currency nor the cash found in possession of the assessee and the revenue did not challenge these basic facts in this case. The Id. CIT(A) noted that the WhatsApp message was found in the mobile of the assessee. When questioned in the statement u/s. 132(4), the assessee has accepted that details of his conversation recorded in WhatsApp chat if unable to explain satisfactory then in that case that amount can be added to his income. Since the assessee has given statement and he has not denied the notings in his WhatsApp messages but has imply stated that he does not remember anything at the moment and would get it verified in due course. Considering that aspect of the matter the Id. CIT(A) hold that this noting is not deaf and dump and he confirmed the action of the Id. AO. The bench noted from the records that the Id. AO made the addition for Rs. 24,20,366/- consist of 21051 dollar [2105166-13,89,366 ] plus Rs. 10,31,000/- written as cash thus it added and made at Rs. 24,20,366/- (13,89,366 plus 10,31,000/- 1. The bench also noted that the id. AQ made an addition for this amount w/s. 69A of the Act and the id. CIT(A) confirmed the action of the Id. AO. The provision of section 69A of the Act empowers the Id. AO make addition of any money, bullion, jewellery or other valuable articles and such money, bullon, jewellery or valuable article is not recorded in the books of accounts maintained. Here the issue is that the money so recorded in the Whatsapp not found at the time of search in the possession of the assessee. Not only that the contention of the assessee that there is a double addition for one transaction le. one for Indian Rupee and another on account dollar and thus the addition of the double the amount. We found force in the argument advanced that there is no investment or expenditure on the part of the assessee found have been recorded in the search proceeding. It is also found that cash in Indian rupee or dollar have been found physically at the time of search. Based on these non-disputed facts before us we are of the considered view that there is no merits in the reasoning advanced by the revenue and therefore, we vacate the addition of Rs. 24,20,366/-. In terms of these observations the ground no. 1 & 2 raised by the assessee is allowed. Ground no. 3 being general in nature does not require any adjudication.”
32. Considering the aforesaid arguments, judicial pronouncement and the fact of the case, I am of the considered opinion that the AO has not established any live link or proximate connection between the Appellant and the receipt of sale consideration of the Dubai property. The alleged movement of funds through various bank accounts or third parties remains unsubstantiated and rests purely on conjecture and suspicion, which is legally impermissible. The absence of any tangible recovery or third-party confirmation of cash movement to the Appellant’s possession seriously impairs the assessment and renders the invocation of Section 69A unsustainable.
33. The Hon’ble Supreme Court in ITO v. LakhmaniMewal Das [1976] 103 ITR 437 (SC) held that there must be a direct nexus between the material found and the formation of belief; vague or remote material cannot justify any adverse conclusion against an Assessee.
34. The allegation, in the absence of any cogent evidence establishing the flow of unaccounted consideration or the involvement of the Appellant in any undisclosed transaction, rests on mere conjecture and lacks evidentiary foundation. Accordingly, the addition made solely on speculative reasoning is not sustainable in law or on facts.
35. In the result the appeal is allowed.”
4. Aggrieved against the order of the Ld. CIT(A) in deleting the impugned addition the Revenue is in appeal before this Tribunal.
5. We have heard rival submissions made on behalf of the respective parties and perused the entire material available on record.
6. The assessee has also filed written synopsis which for the sake of clarity is reproduced as under:
“SYNOPSIS
MAY IT PLEASE YOUR HONOUR:
That to assist this Hon’ble Tribunal in the just adjudication of the present appeal filed by the Appellant-Revenue, and in the interest of justice, the Respondent-Assessee hereby submits the instant Synopsis, which is respectfully prayed to be treated as an integral part of the subject appeal for its judicious adjudication.
MATERIAL FACTS
1. That the Respondent is a Director in M/s Victoria Foods Private Limited (“VFPL”). For the year under consideration, return of income at Rs. 1,98,50,270/- was filed u/s 139(1) of the Income-tax Act, 1961 (“the Act”).
2. That on 21.01.2023, search u/s 132 was conducted in case of Rajdhani Group, and Respondent was one of the persons covered under the search action. During the course of search operation alleged incriminating data in the form of Whatsapp chats of the Respondent with key persons for purported sale of land/property in Dubai were seized.
3. Crucially during the search no cash, foreign currency or material evidencing alleged ownership of Dubai land/ property or receipt of alleged money was found from the possession of the Respondent. Also, no statement u/s 132(4) of the Act was recorded and no queries regarding the alleged investment in Dubai land/property were made from the Respondent.
4. During assessment, however, the Assessing Officer (“Ld. AO”) solely basis the uncorroborated digital data seized (WhatsApp chats), alleged that a property in Gold Tower, Dubai, owned by San and San International DMCC (SSID), was controlled by the Respondent and treated proceeds from sale of said property at AED 6,30,392/- (Rs. 1,30,90,415/-) as “unexplained money” in the hands of the Respondent under Section 69A of the Act.
5. The Ld. CIT(A) in a detailed and elaborate order, allowed the appeal against the impugned assessment order holding (i) no actual recovery of cash, foreign currency, unaccounted assets from the premises/ possession of the Respondent; (ii) Lack of credible documentary evidence establishing ownership of Respondent of the alleged Dubai property; (iii) no corroborative material attributing ownership or receipt of alleged cash amounting to AED 6,30,392 (Rs. 1,30,90,415/-) by the Respondent; (iv) notings in diary/ any other document cannot partake the character of unexplained money u/s 69A of the Act; (v) whatsapp chats uncorroborated by independent evidence are non-speaking, dumb documents and cannot be sole basis of addition and; (vi) alleged moverment of funds through various bank accounts or third parties remains unsubstantiated and rests purely on conjectures and suspicion which is legal impermissible rendering invocation of section 69A unsustainable.
6. Against the aforesaid, Appellant-Revenue has preferred the present appeal before this Hon’ble Tribunal.
REBUTTAL TO APPEAL:
Re: Failure to establish “Ownership” in property for addition of sale proceeds as unexplained money u/s 69A of the Act
7. It is an undisputed and admitted fact that the subject property was legally owned by a third-party entity, namely San & San International DMCC (SSID), a company incorporated in Dubai, UAE. This fact stands accepted/ admitted vide assessment order and is also borne out from the registered sale contract, extracts of which were provided therein.
8. The Respondent neither holds any shareholding, nor any direct or indirect ownership, beneficial interest, or legal right in the said property. Accordingly, there exists no direct or indirect nexus whatsoever between the Respondent and the subject property.
9. Further that, the sale was made to third party i.e. Sh. Dharmendra Mutha (“buyer”), with whom Ld. AO has failed to establish any direct nexus/ live link with the Respondent and also failed to prove/provide any conversation with any key person discussing the sale of the subject property to Sh. Dharmendra Mutha (“buyer”).
10. Therefore, the Assessee neither being the buyer nor the seller of the said Dubai property, was under any legal obligation to disclose such transaction or proceeds thereof, in his personal return of income.
11. Reliance in this regard is placed on the decision of this Tribunal in case of Late Shri Ved Prakash Chanana v. ACIT, ITA No. 4993/DEL/2024 wherein in the absence of cash found at the possession of the assessee, it was held that ownership of Assessee could not be presumed by the Ld. AO. The Tribunal held that addition u/s 69A of the Act cannot be invoked without proving possession and ownership of cash.
12. In the case of DCIT v. Yograj Arora ITA No. 2440/Del/2022, this Tribunal held that “ownership” of money is sine qua non for invoking provisions of Section 69A of the Act. Relevant extracts of the findings are as under:
“9. Admittedly, it is not a case in which the assessee was found to be in possession of the cash of Rs. 1.45 crore in search operation. Therefore, it cannot be presumed that the assessee was the owner of the said cash. To attract the provisions of section 69A sine qua non is “ownership” of money etc. which has not been recorded in the books of account. The Ld. AO has made only presumption that the said cash was ‘available with the assessee’ without bringing on record any material in support thereof. Not only that he went a step further and presumed that the assessee paid the said cash to his brother H.K. Arora only on the basis of conjecture and surmises. The assessee offered explanation for the noting made on page 30 of Annexure A-8 duly supported by the documentary evidence which has been rejected by the Ld. AO in total disregard of all the facts, circumstances and the evidence in the cuse as ordained by the CBDT in its Circular (supra). To apply the provisions of section 69A by the Ld. AO without satisfying the conditions precedent is not sustainable.”
13. The above facts and legal position clearly provide that the Ld. AO failed to establish any direct, proximate, or legally sustainable nexus between the Respondent and the subject property or proceeds thereof. In the absence of ownership, receipt, control, or beneficial interest, no tax liability can be fastened upon the Respondent in respect of a transaction entered between independent third parties.
Re: No physical recovery of cash, foreign currency, money “found” in the possession of Respondent at the time of search
14. It is settled law that for invoking provisions of Section 69A of the Act in respect of cash, money etc., the Assessee has to be found in possession of the same and further, the ownership of such asset is to be established by the Revenue.
15. It is an undisputed fact that there was no physical recovery of cash, foreign currency etc., from the Respondent during the search action and thus the Respondent cannot be said to be in possession of the sum of AED 630,392 (Rs. 1,30,90,415/-) alleged as unexplained money in terms of Section 69A of the Act.
16. Reliance in this regard is placed on the decision of Mumbai Tribunal in case of Rucha Consultancy LLP v. DCIT: [2025] 174 com221 wherein actual physical recovery of cash from the possession of Assessee was held to be mandatory, prior to invoking Section 69A of the Act, as under:
“6.10… A careful perusal of the above said provision would show that this provision could be invoked only if the assessee is “found to be the owner of any money, bullion, jewellery or other valuable article.” Thus, for invoking the provisions of sec.69A of the Act, it is required to be shown that the above said assets were physically available and further, the assessee was found to be the owner thereof. In the instant case, no physical money was found either with the assessee or with any other person and hence the question of the assessee, being owner of the same does not arise. Hence, the provisions of sec.69A are not applicable to the facts of the present case.”
(emphasis supplied)
17. Similar to the above effect, the Hon’ble Jaipur Bench of the Tribunal in case of Shri Virendra Singh Ratnawat v. ACIT: ITA Nos. 179 to 181/JP/2022 vacated the addition u/s 69A of the Act, made vide assessment order in the absence of any physical recovery of cash in Indian rupee or foreign dollar at the time of search.
18. On the contrary, reliance placed by the Appellant in case of CIT v. Daya Chand 250 ITR 327 (Delhi High Court) vide grounds of appeal not warranting physical recovery of cash/asset and sufficiency of proof of ownership of asset for applying Section 69A of the Act, is totally misplaced. The said decision nowhere supports/affirms the above legal interpretation rather the question involved before the Delhi High Court was whether presumption u/s 132(4A) of the Act, has an overriding effect on applicability of Section 68 of the Act, in respect of cash credits found in books seized during search.
Re: Uncorroborated digital data (Whatsapp chats) cannot form sole premise for making addition u/s 69A of the Act
19. That the case of the Appellant rests solely on uncorroborated WhatsApp chats, the alleged seized material, excerpts from which have been relied upon vide assessment order to allege ownership of the Respondent over sale proceeds of Dubai property which:
i. Nowhere substantiate legal ownership of Respondent over the Dubai property;
ii. Nowhere states that the sale proceeds belong to the Respondent:
iii. No record of any receipt of cash by the Respondent:
iv. No evidence establishing purported cash trail.
20. The jurisprudence is well-settled that uncorroborated WhatsApp chats are “dumb documents”, incapable of sustaining an addition in the absence of independent direct evidence establishing nexus, ownership, or receipt of income.
21. Reliance is placed on the decision of this Tribunal in case of Raghav Kumar v. ACIT: ITA No.3214/DEL/2025, where further corroboration for digital data/mobile phone data in the form of Whatsapp chats was required, to constitute credible incriminating material for valid action against the Assessee.
22. In case of Designers Point (India) P. Ltd. v. ACIT: ITA No.2517/Del/2022, this Tribunal held Whatsapp chats on a standalone basis to not constitute as valid evidence in making addition u/s. 69C of the Act, by the Assessing Officer.
23. The Chennai Bench of the Tribunal in case of Mr. A. Johnkumar v. DCIT: ITA No. 3028/Chny/2019) held WhatsApp messages cannot be considered as conclusive evidence to draw an adverse inference against the Assessee, unless those WhatsApp messages are supported by corroborative evidences to indicate that those messages and contents represent undisclosed income of the Assessee.
24. Reliance in this regard is placed on the decision of the Mumbai Bench of the Tribunal in case of DCIT v. Saarrthi Reality and Infra LLP [2025] 176 com859 where the Tribunal held as under:
“7. We have heard the rival submissions and perused the material available on record. The addition in question is solely based on an unverified WhatsApp message extracted from a mobile phone number that is not directly associated with the operational team of the assessee. The individual concerned, Shri Tarun Vohra, has categorically denied any knowledge of the document and clarified that the references to cash therein pertained merely to token booking amounts. The assessee has duly furnished comprehensive documentary evidence substantiating its claim, including sale agreements, cancellation deeds, and corresponding banking transactions. It is also pertinent to note that all transactions were executed at values exceeding the stamp duty valuation and were fully compliant with the provisions of section 43CA of the Act. Upon a careful appraisal of the facts and the evidentiary material on record, we observe that the WhatsApp message relied upon by the Ld. Assessing Officer was retrieved from the mobile device of Shri Tarun Vohra, who was subjected to a search. However, the revenue has failed to bring on record any corroborative material to substantiate the contents of the said message. The impugned document has neither been affirmed by any independent inquiry nor confirmed by any of the parties named therein. In the absence of any supporting material or confirmation, such a WhatsApp message cannot be regarded as a reliable or admissible piece of evidence to warrant an addition under section 69A of the Act.”
(emphasis supplied)
25. Crucially, the Ld. AO failed to conduct any independent enquiry to verify the authenticity of the purported Whatsapp chats and to bring on record such direct evidence/ material establishing possession of funds or ownership of the Respondent over the alleged Dubai property.
26. The WhatsApp chats, at best, show that the Assessee rendered guidance in the process of sale to the relative of one of his past employees, Cherry-picked or uncorroborated WhatsApp conversations, in the absence of any supporting documentary or statutory evidence, cannot substitute legal proof of ownership, receipt, or beneficial interest. It is further respectfully submitted that nowhere under the provisions of the Act, it contemplated that rendering advice or guidance, by itself, can render a person the owner or deemed/beneficial owner of any property or income. Ownership or beneficial ownership under the Act arises only through legal title or specific deeming provisions, and cannot be inferred merely from advisory or professional interaction, a principle rightly appreciated by the Ld. CIT(A).
27. It is a settled law that addition u/s 69A of the Act cannot be based on mere suspicion and extrapolation that the said money might have been received by the Respondent and requires credible material, vide CIT v. Jawahar Lal Oswal [2016] 67 com168 (Punjab & Haryana).
PRAYER
In view of the facts and circumstances of the case and the submissions made hereinabove, the Respondent-Assessee most respectfully prays this Tribunal may be pleased to:
(i) Dismiss the appeal preferred by the Appellant-Revenue, against the elaborate and well-reasoned order passed by the Ld. CIT(A) on due appreciation of facts, legal position, submissions and material placed on record;
(ii) Grant any other order(s), direction(s) or relief(s) that this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case and in the interest of justice.
For the ASSESSEE (RESPONDENT)
DATE: 06.01.2026
PLACE: NEW DELHI”
7. The matter relates to alleged receipt of sale consideration of a property located in Dubai held by M/s. San and San International DMCC (SSID) routed through intermediaries; the same was received by the assessee in cash as is the case made out by the revenue. In order to justify the same, the Revenue, particularly, the AO, has relied upon WhatsApp conversation between different parties with the assessee before us. In fact, the subject property was legally owned by SSID whose sole shareholder was one Anand Maheshwari. The property was sold to a third party purchaser, namely, Mr. Dharmendra Mutha, the screen shot whereof is reflecting in page 28 of the assessment order. Various attempts have been made by the Revenue to establish the connection between the appellant and the transaction through the employment of one Rajendra Maheshwari being the father of Shri Anand Maheshwari with M/s Victoria Foods Pvt. Ltd. On the basis of the WhatsApp chat, a show cause notice was issued to the assessee to explain with documentary evidences as to why Rs.1,30,90,415/- i.e., AED 6,30,392 received by the assessee on the sale of office No.B3-02-02, Gold Tower, Plot No.32, Al Thanyah Fifth, Dubai should not be added in the hands of the assessee. The case of the assessee is that there was no reference that the alleged money was received by the assessee or that there is any cash trail which could prove that the money was actually received by the assessee. Therefore, merely the assessee is having the excessive control over the property and directions were also given by the assessee to Shri Maheshwari to deposit the sale consideration to different accounts of different persons and without any evidence showing actual receipt of the said amount by the assessee, the addition u/s 69A of the Act is not sustainable, rather, the same is nothing, but, a product of surmises and conjectures.
8. Before the first appellate authority, a remand report was called for and the Ld. AO reiterated the reliance on WhatsApp chat extracts which were already part of the assessment order which remained uncorroborated and, according to the Ld. CIT(A), found to be devoid of any evidentiary support. Further, that without any corroborative material, the ownership of receipt of income, i.e., sale proceeds to the appellant under the charging provision of section 69A of the Act is not satisfied. In fact, there is no material brought by the Ld. AO on record establishing the fact that the assessee was the owner or recipient of the alleged cash amounting to AED 6,30,392 (Rs.1,30,90,415/-). Considering this aspect of the matter, the decision taken by the Ld. CIT(A) relying upon the judgement passed by different judicial authorities appearing at page 12 of the Ld.CIT(A)’s order that unless corroborated by independence evidence, the WhatsApp chat is non-speaking, dump document and cannot be the sole basis of an addition and, further, that the addition cannot be sustained merely on the basis of the figures vague statements in electronic chat without real time corroboration or actual recovery of unexplained assets is found to be correctly applied. Relevant to mention that no such alleged cash as received by the assessee has ever been seized from the search of the assessee’s premises. When neither any such foreign currency are recovered from the premises of the assessee, this fact completely demolishes the hypothesis that the assessee has received unaccounted cash on the sale of Dubai property, particularly when the AO has not been able to establish any live link or proximate connection between the assessee and the receipt of sale consideration of the property in question in Dubai and merely on the movement of funds through various bank accounts or through parties when remains unsubstantiated, the entire addition invoking Section 69A of the Act is found to be purely on conjectures and suspicion and, therefore, bad in law and not sustainable in the eyes of law as held by the Ld.CIT(A) while deleting the addition made by the Ld. AO is found to be just and proper so as not to warrant any interference. Thus, the order passed by the Ld. CIT(A) is upheld. The grounds of appeal preferred by the Revenue is found to be devoid of any merits and, thus, dismissed.
9. In the result, the appeal of the Revenue is dismissed.
Order pronounced in open court on 04.02.2026.
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