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Facts
During a search, WhatsApp chats indicated the assessee arranged Rs. 4,00,000/- in cash for his brother and Dr. Pahuja. The Assessing Officer added this amount, which was confirmed by the CIT(A). For another assessment year, a Rs. 5,00,000/- addition was made based on seized documents concerning the purchase of shop/office spaces.
Held
The Tribunal noted that the assessee claimed telescoping benefit against additional commission income declared. However, this claim was not properly raised or examined by the lower authorities. Therefore, the issue was restored to the Assessing Officer for verification of the declared income and its utilization.
Key Issues
Whether telescoping benefit can be allowed against declared additional income when not properly examined by lower authorities? Whether additions made on basis of WhatsApp chats and seized documents are valid without proper verification of the source of funds?
Sections Cited
69B, 139(1), 132, 153A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER IT(SS)A No.29/PUN/2025 Assessment year : 2020-21 Dilip Naraindas Ramchandani ITO, Central Circle 2(4), S.No.138 (Part), Calrion F-23, Aundh, Vs. Pune Pune – 411007 PAN: ADDPR6327H (Appellant) (Respondent) Assessment year : 2021-22 Dilip Naraindas Ramchandani ITO, Central Circle 2(4), S.No.138 (Part), Calrion F-23, Aundh, Vs. Pune Pune – 411007 PAN: ADDPR6327H (Appellant) (Respondent) Assessee by : Shri Nikhil S Pathak & Arrchanea Sheety Department by : Shri H. Ananda, CIT-DR Date of hearing : 01-04-2026 Date of pronouncement : 02-04-2026 O R D E R PER R.K. PANDA, VP:
The above 2 appeals filed by the assessee are directed against the separate orders dated 17.07.2025 of the Ld. CIT(A), Pune-12 relating to assessment years 2020-21 and 2021-22 respectively. Since identical grounds have been raised by the assessee in both the appeals, therefore, for the sake of convenience, these were heard together and are being disposed of by this common order.
2 IT(SS)A No.29/PUN/2025 IT(SS)A No.29/PUN/2025 ( A.Y. 2020-21):
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) in confirming the addition of Rs.4,00,000/- made by the Assessing Officer u/s 69B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on the basis of WhatsApp chat.
Facts of the case, in brief, are that the assessee is an individual and filed his return of income u/s 139(1) of the Act on 29.12.2020 declaring total income of Rs.11,11,000/-. A search and seizure action u/s 132 of the Act was conducted in Nandan Group of cases on 03.02.2021 during which the residential premises of the assessee was also covered. During the course of search and seizure action at the residential premises of the assessee certain incriminating documents pertaining to him were found and seized. Accordingly, a notice u/s 153A of the Act was issued and served on the assessee in response to which the assessee filed his return of income on 03.03.2022 declaring total income of Rs.12,14,010/-.
During the course of assessment proceedings the Assessing Officer observed that the seized documents as per Bundle Nos.01 & 02 contain the screenshot of WhatsApp chat on 26.02.2020 taken from the mobile of the assessee. The said screenshot reflects certain conversations between the assessee and his brother Shri Shailesh Ramchandani in which Shri Shailesh Ramchandani was requesting the assessee to arrange Rs.5,00,000/-. The assessee in response to the said request had stated that he had arranged Rs.4,00,000/- in cash but he will give the cash of 3 IT(SS)A No.29/PUN/2025 Rs.2,00,000/- to him and the remaining amount of Rs.2,00,000/- to Dr. Pahuja. The assessee has further stated that the amount of Rs.2,00,000/- will be arranged through bank transfer. The Assessing Officer, therefore, confronted the same to the assessee. The assessee in his reply submitted that he has given only Rs.2,00,000/-. However, the Assessing Officer did not accept the explanation given by the assessee and made addition of Rs.4,00,000/- to the total income of the assessee apart from other additions which are not subject matter of appeal before the Tribunal.
In appeal, the Ld. CIT(A) confirmed the addition made by the Assessing Officer.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that the assessee has declared additional income of Rs.21 lakhs out of commission income and therefore, the said cash was available with the assessee. Relying on various decisions he submitted that telescoping benefit should be given out of that additional income declared.
The Ld. DR on the other hand submitted that the assessee has taken this plea for the first time and neither the assessee has explained nor the Assessing Officer has given a finding regarding the utilization of such additional income. He 4 IT(SS)A No.29/PUN/2025 submitted that since the order of the Ld. CIT(A) is a detailed speaking order, therefore, the same should be upheld and the grounds raised by the assessee be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We find the Assessing Officer in the instant case made addition of Rs.4,00,000/- u/s 69B of the Act on the basis of certain WhatsApp chat according to which the assessee has given cash of Rs.4,00,000/- to his brother and Dr. Pahuja. We find the Ld. CIT(A) sustained the addition made by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that since the assessee has declared additional income of Rs.21 lakhs out of commission income therefore the said cash was available with the assessee and therefore, telescoping benefit should be given out of such additional income declared. It has been held in various decisions that when the assessee declares additional income and can prove that such additional income has not been utilized in any other way, then the telescoping benefit can be given out of such additional income declared. However, in the instant case neither the assessee has claimed such telescoping benefit before the Assessing Officer or the Ld. CIT(A) nor the Assessing Officer has discussed anything on this issue i.e. utilization of such additional income otherwise. We, therefore, deem it proper to restore the issue to the file of the Assessing Officer with a direction to verify as to whether the assessee has declared additional income of Rs.21 lakhs and if so, whether the assessee has taken any benefit out of such 5 IT(SS)A No.29/PUN/2025 income towards any other asset or expenditure or utilization. If the assessee has not utilized the additional income in any other way then the Assessing Officer is directed to give the telescoping benefit. Needless to say the Assessing Officer shall provide due opportunity of being heard to the assessee while deciding the issue. The main grounds raised by the assessee are accordingly allowed for statistical purposes.
The assessee has raised certain additional grounds. However, the Ld. Counsel for the assessee did not press these additional grounds for which the Ld. DR has no objection. Therefore, the said additional grounds are dismissed as ‘not pressed’.
After hearing both the sides we find the assessee in the impugned appeal has challenged the order of the Ld. CIT(A) in confirming the addition of Rs.5,00,000/- made by the Assessing Officer u/s 69B of the Act on the basis of certain seized documents according to which the assessee has paid cash amounting to Rs.5,00,000/- against the purchase of shop / office spaces in the project ‘Nandan Probiz’ a commercial project developed by M/s. Nandan Associates.
In appeal, the Ld. CIT(A) sustained the addition made by the Assessing Officer.
6 IT(SS)A No.29/PUN/2025 13. It is the submission of the Ld. Counsel for the assessee that the telescoping benefit should be given out of the commission income declared by the assessee amounting to Rs.21 lakhs and Rs.3.71 lakhs declared during the assessment years 2020-21 and assessment year 2021-22 respectively. We have already decided the issue i.e. telescoping benefit out of the commission income declared while deciding the issue for assessment year 2020-21 in the preceding paragraphs and restored the issue to the file of the Assessing Officer for verification. Following similar reasonings, we restore the issue to the file of the Assessing Officer with similar directions. The grounds raised by the assessee are accordingly allowed for statistical purposes.
The assessee has raised certain additional grounds. However, the Ld. Counsel for the assessee did not press these additional grounds for which the Ld. DR has no objection. Therefore, the said additional grounds are dismissed as ‘not pressed’.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.