WhatsApp Messages alone Cannot Justify addition under Section 69C Addition: Mumbai ITAT
In a significant ruling of ACIT v/s Prashant Prakash Nilawar , the Mumbai ITAT has held that WhatsApp messages alone are insufficient to justify additions under Section 69C (Unexplained Expenditure) of the Income Tax Act, 1961.
Let us have a Short Overview of the case which is attached herewith:
The Assessing Officer (AO) made an addition based on WhatsApp messages exchanged between the taxpayer and third parties, alleging undisclosed financial transactions.
The taxpayer argued that messages alone do not constitute evidence of actual financial dealings, as no bank records, invoices, or accounting entries supported the claim.
The ITAT ruled in favor of the taxpayer, emphasizing that electronic message must be backed by corroborative financial evidence to justify tax additions.
Key Takeaways:
1. Digital communications alone do not prove financial transactions.
2. The burden of proof lies on tax authorities to provide substantive evidence beyond messages.
3. Protects taxpayers from arbitrary additions based on informal communication.
This ruling sets a precedent for how digital evidence is treated in tax assessments, ensuring that taxation decisions are based on concrete financial proof rather than mere suspicion.
The Copy Of the Appellate is as under:
