3 hrs ago
Pune ITAT Deletes ₹10.52 Lakh Addition Based on WhatsApp Chats
The tax department said WhatsApp messages found on another person’s phone showed that a lawyer had made certain payments.
It treated the payments as unexplained investments and added ₹10.52 lakh to his taxable income.
The lawyer denied that the messages described his transactions.
He also said he had not received complete, verifiable electronic records or been allowed to question the phone’s owner.
The Pune ITAT examined how the WhatsApp evidence had been collected and proved.
It said the department had not properly established that the electronic data was authentic.
The Tribunal also found no other independent evidence supporting the department’s claim.
It therefore cancelled the tax addition.
The Pune ITAT deleted a ₹10,52,450 unexplained-investment addition against lawyer Rameshwar Fakirchand Totala for assessment year 2020-21.
The Income Tax Department relied on WhatsApp data recovered from Prakash Motwani’s mobile phone during a 30 November 2023 search.
The department alleged the chats recorded Totala’s payments in “bhisi” or chit-fund-like transactions during financial year 2019-20.
The Tribunal found that the electronic data’s authenticity was not established under applicable electronic-evidence requirements.
It also found no independent evidence supporting the chats and directed the Assessing Officer to delete the addition under Section 69.
- Who
- Rameshwar Fakirchand Totala, the taxpayer and a practicing lawyer; the Income Tax Department; and Prakash Motwani, whose mobile phone contained the WhatsApp data.
- What
- The Pune ITAT deleted a ₹10,52,450 addition treated as an unexplained investment under Section 69 of the Income-tax Act.
- Where
- The case was decided by the Pune bench of the Income Tax Appellate Tribunal, following a search at premises associated with the Manjeet Pride Group and Gadiya Group.
- When
- The disputed assessment concerned assessment year 2020-21 and financial year 2019-20; the search took place on 30 November 2023, and the ITAT order was pronounced on 21 August 2026.
- Why
- The Tribunal found that the department had not established the authenticity of the third-party WhatsApp data or supported it with independent evidence.
Taxpayer’s position
Revenue’s position
Meaning of WhatsApp chats
Taxpayer’s position
Totala denied that the WhatsApp messages represented his transactions and challenged reliance on material recovered from another person’s phone.
Revenue’s position
The Assessing Officer interpreted entries in the chats as recording Totala’s payments in bhisi transactions and treated them as unexplained investment.
Electronic evidence
Taxpayer’s position
Totala argued that he was not given complete and verifiable copies of the electronic material and that its authenticity had not been properly established.
Revenue’s position
The department relied on the recovered WhatsApp data as the basis for the addition, while the Tribunal found that the prescribed requirements for electronic evidence had not been demonstrated.
Supporting evidence and hearing rights
Taxpayer’s position
Totala challenged the absence of independent corroboration and said he had not been allowed to cross-examine Motwani.
Revenue’s position
The CIT(A) upheld the addition on the ground that Totala had not explained the source of the cash payment, but the ITAT found no independent evidence beyond the chats.
Key facts
- Taxpayer
- Rameshwar Fakirchand Totala, a practicing lawyer from Maharashtra
- Assessment year
- 2020-21
- Addition disputed
- ₹10,52,450
- Statutory provision
- Section 69 of the Income-tax Act
- Evidence used
- WhatsApp data recovered from Prakash Motwani’s mobile phone
- Search date
- 30 November 2023
- Outcome
- The Pune ITAT set aside the CIT(A) order and directed deletion of the addition
Sources
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