The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) quashed the income tax addition based on third-party whatsapp chats without corroborative evidence.
The assessee, Kimaya Buildtech LLP, a Limited Liability Partnership and during assessment proceedings, based on search findings in the case of M/s. Blomstrende Buildwell Pvt. Ltd. Group conducted on 15.01.2021, the AO relied upon digital data and statements of Amit Chauhan alleging that the assessee received Rs. 4 crores in cash over and above the recorded sale consideration of Rs. 9 crores for a property.
The assessee denied receiving any cash payment and contended that the transaction was duly recorded in the registered sale deed. It also disputed the allegation of accommodation entry of Rs. 20 lakhs loan. Despite the explanation, the AO made an addition of Rs. 4 crores, assessing total income at Rs. 5,32,05,340/-. The CIT(A) upheld the addition hence the assessee preferred an appeal before the Tribunal.
The counsel for the assessee a stated that the addition has been made in the hands of the assessee solely based on the statements of third party and whatApp chat found from his mobile and therefore, proceedings in the case of the assessee should have been initiated under Section 153C of the Income Tax Act.
The counsel for the assessee further submitted that the sole basis for the addition of Rs. 4.00 crores was the alleged statement of Amit Chauhan and WhatsApp chat recovered from his mobile, however, the same was never supplied to the assessee despite of the repeated requests and the WhatsApp chat which are supplied to the assessee are not related to the issue in hand.
The counsel for the Revenue supported the orders of lower authorities and submits that in the instant case, the order was passed under Section 143(3) of the Income Tax Act as the date of search fallen in the assessment year under appeal and, therefore, there is no requirement to issue the notice under Section 153C of the Income Tax Act in the instant case.
The Tribunal of Sudhir Kumar, Judicial Member and Manish Agarwal, Accountant Member noted that the WhatsApp chats relied upon by the AO were recovered from a third party, Amit Chauhan, who alleged payment of Rs. 4 crores in cash. However, no independent corroborative evidence was brought on record. The Tribunal held that the presumption under section 132(4A) is applicable against the person from whose possession the documents are found and cannot be invoked against a third party, i.e., the assessee, without supporting evidence. Therefore, the assessee was not required to explain the contents of the seized WhatsApp chats or statements.
The bench relied on the judgment in CIT vs Mantri Share Brokers (P.) Ltd., wherein the Supreme Court has dismissed the SLP filed against the order of Rajasthan High Court wherein the additions were deleted made solely on the basis of statement of Directors without bringing on record any corroborative material either in the form of cash, bullion, gold, jewellery or documents justifying the said statement.
Deleting the income tax addition, the bench concluded by noting that “As observed in the instant case, the addition made solely on the basis of statement of Shri Amit Chauhan and no corroborative material/evidences have been brought on record to support the allegation that a sum of Rs. 4.00 crores was paid to the appellant.”
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KIMAYA BUILDTECH LLP vs DCIT CENT CIRCLE 2
CITATION : 2026 TAXSCAN (ITAT) 247Case Number : ITA 1803/DEL/2026Date of Judgement : 08 July 2026Coram : SUDHIR KUMAR, JUDICIAL MEMBER AND MANISH AGARWAL, ACCOUNTANT MEMBERCounsel of Appellant : Sudhir Sahgal, CACounsel Of Respondent : Jitender Singh, CIT DR
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Salary, whether Paid or not, is Taxable u/s 15: ITAT Restores matter to AO for Determination [Read Order]
The tribunal considered the bank statement showing non-receipt and held that is it not conclusive, and the offer letter too does not resolve the issue.
29 July 2026 5:28 PM
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, restored a matter back to the Assessing Officer (AO) for determination and held that salary, whether paid or not, is taxable under Section 15 of the Income Tax Act, 1961.
The assessee, Nilangsu Mitra, did not file his return for A.Y. 2020-21 under Section 139. His case was flagged on the Insight Portal under “RMS-Nonfiling of return-PAN cases”. As Form 26AS and Insight data reflected transactions during F.Y. 2019-20 without a corresponding return, income of INR 41,26,547/- was treated as having escaped assessment under Section 147 of the Act.
In his reply, the assessee stated that the return could not be filed due to covid in the family, job loss and job changes, and sought permission to file it. He additionally filed Form 16s, bank statements, computation and a housing loan certificate, and requested payment in installments.
The AO, relying on Form 16, rejected some contentions and treated INR 2,74,958/- as undisclosed salary income. The assessee appealed before the CIT(A) who observed that the assessee failed to disprove receipt of the balance and the addition was sustained.
Before the ITAT, the counsel for the assessee filed the offer letter, HDFC bank statement and judicial precedents to contend that, since the disputed amount was not received, it cannot be taxed at the assessee’s hands. The tribunal considered the bank statement showing non-receipt and held that is it not conclusive, and the offer letter too does not resolve the issue.
Finally, the tribunal directed the matter to be restored to the file of the AO to determine salary, if any, was due to the assessee. The grounds were allowed for statistical purposes.
The bench of Prashant Maharishi (Vice-President) partly allowed the appeal on 20.07.2026.
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Nilangsu Mitra vs Income Tax Officer
CITATION : 2026 TAXSCAN (ITAT) 1158Case Number : ITA No. : 1421/Bang/2026Date of Judgement : 20 July 2026Coram : PRASHANT MAHARISHICounsel of Appellant : KoushikCounsel Of Respondent : Ganesh R Ghale
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