VIRENDRA SINGH RATNAWAT,JAIPUR vs. ACIT, CENTRAL CIRCLE-2, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA Nos. 179 to 181/JP/2022 fu/kZkj.k o"kZ@Assessment Years : 2016-17 to 2018-19 cuke Shri Virendra Singh Ratnawat, Asstt. Commissioner of Vs. 53, Golimar Garden, Sahkar Marg, Income-Tax, Central Jaipur Circle-02, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACGPR 0733 D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. S. R. Sharma (CA) & Sh. R. K. Bhatra (CA) jktLo dh vksj ls@ Revenue by : Sh. Ajay Malik (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 04/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 01/01/2024 vkns'k@ ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM

These three separate appeals filed by the assessee and are arising out of the order of the Commissioner of Income Tax (Appeals)-4, Jaipur dated 30/03/2022 [here in after (CIT(A))] for assessment years 2016-17 to 2018-19 which in turn arise from the order dated 26.12.2019 passed under

section 143(3) r.w.s 153A of the Income Tax Act, by ACIT, Central Circle- 02, Jaipur.

2 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 2. Since the issues involved in the assessee’s appeal for 3 different

years are almost identical and are almost common, except the difference in

figure of additions disputed, therefore, these appeals were heard together

with the agreement of both the parties and are being disposed off by this

consolidated order.

179/JP/2022 may be taken as a lead case for discussions as the issues

involved in the lead case are common and inextricably interlinked or in fact

interwoven and the facts and circumstances of other cases are identical

except the difference in the amount in other assessment year. The ld. DR

did not raise any specific objection against taking that case as a lead case.

Therefore, for the purpose of the present discussions, the case of ITA No.

ITA No. 179/JP/2022 is taken as a lead case. Based on the above

arguments we have also seen that for both the appeals grounds are similar,

facts are similar and arguments were similar and therefore, were heard

together and are disposed by taking lead case facts, grounds, and

arguments from the folder in ITA No. 179/JP/2022.

3 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 4. Before moving towards the facts of the case we would like to mention

that the assessee has assailed the appeal in ITA No. 179/JP/2022 on the

following grounds;

“1. That on the facts and in the circumstances of the case the Ld. CIT(A) is wrong, unjust and has erred in law in confirming finding recorded by the Ld. AO that whatsapp messages contained in the mobile phone found from the appellant during the course of search relates to alleged transactions undertaken and that those transactions relates to and or carried by him.

action u/s 132 of the Income Tax Act, 1961 and/or survey action u/s 133A

of the Act was carried out by the Income Tax Department on the members

of Kiran Fine Jewellers Group on 02.08.2017 of which the Assessee is one

of the members. The jurisdiction over the case was assigned to Central

Circle-2, Jaipur by the Pr. Commissioner of Income Tax, Jaipur-III, Jaipur

by means of an order u/s 127 of the Act circulated vide Pr. CIT-

3/ITO(Hqr)/JPR/2018-19/2749 dated 01-02-2019. Notice under section

153A of the Act dated 18.02.2019 was issued and served upon the

Assessee by speed post on 20.02.2019 requiring it to file a true and correct

4 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT return of income as prescribed under Rule 12 of the Income Tax Rules,

1961 within 15 days of the service of the said notice.

5.1 In response to the said notice(s) a return declaring an income of Rs.

13,42,940/- was filed by the assessee on 02.03.2019, which is at the same

income declared in the original return of income filed by the assessee. The

source of income of the assessee is salary and income from other sources.

5.2 During the course of search operation, whatsapp message from

Mobile No. 99502 00007 were retrieved and printouts were taken and

inventorised as Annexure AS, Exhibit -3 page no. 1 to 31. Based on that

print out of the whatsapp chat / image the ld. AO issued a query letter cum

show cause notice [ SCN ] to the assessee vide letter dated 04.09.2019 to

explain the nature and source of such transactions. In response to the said

SCN, the assessee submitted that whatsapp message in the mobile no. of

a person does not mean that the said message pertains to the assessee as

phone may be used by other person in the absence of owner. The

assessee further contended that noting in the message are deaf and dump.

The ld. AO considered the reply of the assessee but as the same was

considered as general and no specific explanation was offered and

5 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT therefore, the same was not found tenable and made the addition of Rs.

24,20,366/- under section 69 of the IT Act, 1961 based on the Whatsapp

messages contained in the Mobile No. 99502 00007.

of the Act, assessee preferred an appeal before ld. CIT(A). Apropos to the

grounds so raised by the assessee, the relevant finding of the ld. CIT(A) is

as under:-

“(vii) As regards the addition of Rs. 24,20,366/- made by the AO, it is observed that the whatsapp chat refers to total dollar 21051 cash Rs. 10,31,000/-. Since the value of one US Dollar was equivalent to Indian Rs. 66/- on the date of search, therefore the total value was worked out at Rs. 13,89,366/- by the AO. Apart from the above as per the whatsapp chat there is a noting of Rs. 10,31,000/- and therefore the contention of the appellant that the value of total US Dollar mentioned in the chat was at Rs. 10,31,000/- is not correct. I find the AO has rightly made the addition of Rs. 24,20,366/- and in no case it can be considered that the double addition has been made by the AO. Accordingly, the addition of Rs. 24,20,356/- is sustained and the Ground of Appeal No. 1 and 2 are dismissed.

5.1 The submissions of the appellant as per the statement of facts enclosed with Form No. 35 and reiterated during the appellate proceedings are summarized as under:

6 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT accordingly the said section was not in existence in the assessment year 2016- 17. Thus the charging of tax under section 115BBE is other wise wrong and bad in law.

5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:

(i) The Ld. A/R has challenged the invocation of provisions of section 115BBE by stating that no income in the case of the appellant was assessable u/s 69A of the Act and therefore the provisions of section 115BBE were not applicable in the case of the appellant.

(ii) I have considered the submissions of the Ld. A/R of the appellant and it is observed that section 115BBE was first introduced in the Income Tax Act, 1961 by the Finance Act, 2012 which was designed to impose higher tax burden on the assessee's who failed to explain the nature of source of their income, expenditure, investments etc. with the object to curb the black money and penalize the assesses for evasion of tax. Subsequently, amendment in the said section was brought by the Taxation Laws (Second Amendment) Act, 2016 to clearly tax the income at a higher rate in all the cases where the income is assessable under sections 68, 69, 69A, 69B, 69C or 69D of the Act whether the income is offered by the assessee itself in its return under any of these six sections or the assessment is made by the AO under these sections.

(iii) Further, as per the provisions of section 115BBE, the income in nature of incomes prescribed u/s 68 to 69D shall be subject to higher tax rate @ 30% u/s 115BBE upto the AY 2016-17 and would be subject to higher tax rate @ 60% u/s 115BBE from 01.04.2017 onwards, Infact under the IT Act, when omission to record any entry has itself been defined to be deemed as an attempt to evade tax/penalty/interest, then non-recording or incorrect recording of any entry in books of accounts, for the purposes of section 68 to 69D, also needs to be understood in the same manner, as attempt to evade tax/penalty/ interest etc. Therefore, a conjoint reading of section 115BBE with section 68/69A and explanation to section 276C, would reveal that even in case where assessee discloses some unrecorded incomes subsequently in statements u/s 132(4)/ 131(1) or in ROI u/s 139/148/153A or application filed before ITSC u/s 245C(1), which otherwise was assessable under the deeming provisions as being nor recorded in books or incorrectly recorded, it does not take away such disclosed

7 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT incomes from being in the nature of income assessable u/s 68 to 69D and consequently shall not escape the rigors of applicability of section 115BBE.

(iv) Since the addition of Rs. 24,20,366/- has been made by the AO u/s 69A of the Act respectively, therefore the contention of the appellant that the provision of section 115BBE is not applicable is found not acceptable. Infact the addition has been made u/s 69A of the Act and therefore the provisions of section 115BBE are found applicable in the instant case of the appellant. In view of the above legal position, I find that the AO was justified in taxing such undisclosed income at the higher tax rate at 30% u/s 115BBE of the Act on the amount of Rs. 24,20,366/-. Thus, the levy of higher rate of tax at 30% u/s 115BBE on the aforesaid amount is confirmed and the Ground of Appeal No. 3 is dismissed.”

the ld. CIT(A), the assessee preferred the present appeal on the ground as

reproduced hereinabove. To support the various grounds so raised by the

ld. AR of the assessee, he has filed the written submissions and the same

is reproduced herein below:

“In the matter of above appeal, we have been directed to submit as follows:-

8 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 3. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.

A search and seizure action was carried out by the Income Tax Department under section 132 of the I.T. Act, 1961 on 28.08.2017. During the course of search no incriminating documents were found or seized by the Department except Whatsapp chattings and images of the same were taken by the search party during the course of search. The ld. AO made the addition of Rs. 24,20,366/- under section 69 of the IT Act, 1961 on account of Whatsapp messages contained in the Mobile No. 99502 00007. During the course of assessment proceedings, the appellant challenged the said addition legally as well as factual on merits. But the ld. AO after summarily rejecting the submissions and facts of the case, made the addition of Rs. 24,20,366/- without bringing on record any corroborative supporting evidence and making any enquiry.

The appellant challenged the said addition made by the ld. AO legally as well as on facts and merits before the Ld. CIT(A) but the Ld. CIT (A) vide para 4.2 of her impugned order relying on the judgment of the Hon’ble Supreme Court in the case of Amba Lal Sarabhai Enterprises Ltd. vs. KS Infraspace Ltd. confirmed the addition made by the ld. AO. The appellant has challenged the said addition sustained by the ld. CIT (A) before your Honours by raising the grounds of appeal supra.

9 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.

It is evident from the above said provisions that the proviso is applicable to the books of accounts, other documents, money, bullion, jewellery or other valuable article or thing belongs to such person. In this connection it is submitted that the whatsapp chattings are neither books of accounts nor any valuable document etc. Further, it is submitted that the words in sub-section (4A) are “may be presumed”. The presumption under sub-section (4A) is a rebuttable presumption and accordingly the presumption under that sub-section would not be available for the purpose of framing a regular assessment. Kindly refer the judgment in case of P.R. Mitrani vs. CIT, 157 taxman 325. Further now it is a well settled legal position that a non speaking document without any corroborative documentary evidence on record and findings that such document has materialized into transaction giving rise to the income of the assessee had not been disclosed to the department by such assessee has to be disregarded for the purpose of assessment to be framed pursuant to search and seizure action. From the search and seizure perspective such non speaking documents are referred to as the dumb document. In this connection it is also submitted that a fictional receipt cannot be deemed to be a receipt in the absence of any cogent material to support the factum of actual receipt. Refer K.P. Verghese vs. ITO, 131 ITR 597 (SC). Further, the Hon’ble Delhi High Court in case of CIT vs. D.K. Gupta (2008) 174 taxman 476 held as under :- “4. Consequently, the tribunal upheld the findings of the Commissioner of Income-tax (Appeals) and agreed with the view taken by the latter that the assessee was liable to tax only on those receipts which had been proved to be income in the hands of the recipient. As a result thereof, the Tribunal found no reason to interfere with the findings recorded by the Commissioner of Income- tax (Appeals) on the ground that the same were based on valid and cogent materials placed on record and also produced before the Assessing Officer during the course of assessment proceedings. The Tribunal also noted that all the evidences, materials, explanations were furnished before the Assessing Officer and it is on the basis of such material that the Commissioner of Income-t6ax (Appeals) had arrived at the conclusion that no addition was warranted on the basis of the seized diaries. 5. We have examined the impugned order in detail and have also heard the counsel for the parties and we find that the issues sought to be raised before us are purely issues of fact. The Tribunal, being the final fact finding authority, has returned a certain set of facts. We find no perversity in such

10 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT findings and consequently, no question of law, what to speak of a substantial question of law, arises for our consideration. The appeal is dismissed.” On similar lines, the Hon’ble Delhi ITAT in case of Ashwini Kumar v. ITO (1991) 39 ITD 183 held that in the case of dumb document, revenue should collect necessary evidence to prove that the figures represent incomes earned by the assessee. In view of the above settled law on the issue, the action of the ld. AO in the provisions of section 132(4A) is grossly wrong and bad in law. 3(ii) Computer record cannot be relied without ensuring its source and authenticity. It is further submitted that assessing officer has not recorded any satisfaction that all the requisite steps were taken to ensure that data output of Pen Drives / computer records seized during the search were analysed on as it is basis and has not been tempered by anyone. In Anvar P.V. v. P.K. Basheer [2014[ SSC Online SC 732 (SC), Hon'ble Supreme Court held that in case of electronic devices, such as CD, VCD, chip, when produced as digital evidence, the same is required to be accompanied by certificate in terms of Section 65B of Evidence Act at time of taking document. If that certificate is not produced, secondary evidence pertaining to electronic record is inadmissible. The court observed “Any documentary evidence by way of an electronic record under the Evidence Act, in view of Sections 59 and 65A, can be proved only in accordance with the procedure prescribed Under Section 65B. Section 65B deals with the admissibility of the electronic record. The purpose of these provisions is to sanctify secondary evidence in electronic form, generated by a computer. It may be noted that the Section starts with a non obstante clause. Thus, notwithstanding anything contained in the Evidence Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document only if the conditions mentioned Under Sub-section (2) are satisfied, without further proof or production of the original. The very admissibility of such a document, i.e. electronic record which is called as computer output, depends on the satisfaction of the four conditions Under Section 65B (2). “ [Emphasis Supplied]. Hon’ble Apex Court held that these safeguards are taken to ensure the ‘source and authenticity’, which are “the two hallmarks pertaining to electronic record sought to be used as evidence;. The importance of following this procedure was emphasized by the fact that electronic records are more susceptible to tampering, alteration, transposition, excision, etc. and in absence of these safeguards, the whole trial based on proof of electronic records can lead to “travesty of justice’.

11 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT “Only if the electronic record is duly produced in terms of Section 65B of the Evidence Act, the question would arise as to the genuineness thereof and in that situation, resort can be made to Section 45A – opinion of examiner of electronic evidence. The Evidence Act does not contemplate or permit the proof of an electronic record by oral evidence if requirements Under Section 65B of the Evidence At are not compiled with, as the law now stands in India.” Further recently, in ACIT vs. Katrina Rosemary Turcotte [ITA Nos. 3092/Mum./2015 to 3097/Mum./2015, decided on 11.10.2017[ The Hon'ble ITAT Mumbai held that addition made on the basis of a print out taken from the computer of a third party without there being no other corroborative evidence brought on record to prove the fact that the payment mentioned in the seized material was actually received by the assessee, not sustainable. 4(i) The assessee also challenges the applicability of provisions of Section 69A, as applied by the ld. AO in making the impugned addition of Rs. 24,20,366/- as follows:- (a) The provisions of section 69A are reproduced herein below :- “Sec. 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.” As per above provisions of section 69A, it is evident that to make any addition under section 69A, the onus is on the department to establish that the assessee is found to be owner of the money, bullion, jewellery or other valuable article and such money, bullion, jewellery or other valuable article is not recorded in the books of account, if any, maintained by him and assessee offers no explanation about the nature and source of acquisition of the said items or the explanation offered by him is not, in the opinion of the AO, found satisfactory. 4(ii) The assessee during the course of assessment proceedings, regarding the whatsapp chattings submitted as follows:- A. It is a well known fact regarding whatsapp messages that the messages in the mobile phone of a person does not mean that the said message(s) pertains to him and no adverse inference can legally be drawn against the owner of the mobile phone. This is because of the facts that sometimes messages are being forwarded/shared in a group and the phone may be used by some

12 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT known person(s), friend(s) and/or some other person in the absence of the owner of mobile phone. Thus generally only on the basis of messages in the mobile phone or a whatsapp call know adverse inference legally can be drawn against the owner of the phone without any supporting corroborative evidence tenable in the eyes of law. In assessee’s case the above submitted basic principal/theory is applicable as it is. The submissions are driving support from the alleged print out of the whatsapp message, copy of which supplied by the I.T. department to assessee that the noting in the messages are deaf and dumb. As now it is a settled position of law on the issue that tax can be levied on the basis of document found and seized during the course of search only when the document is a speaking one. The document should speak either out of itself or in the company or other material found on investigation. The document should be clear and unambiguous in respect of all the four components of the charge of tax. If it is not so the document is only a dumb document. No charge can be levied on the basis of a dumb document. Thus a document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year. Any gap in the various components for the charge of tax must be filled up by the Assessing Officer through investigations, correlations, independent third party enquiries with other material found either during the course of search or on investigations. Further, the ld. AO should also brought on record the supporting corroborative evidences i.e. evidences collected in making third party/independent enquiries. In case of non-conducting the said enquiries and without any supporting corroborative material on record no addition can be made on the basis of dumb document. 5. With reference to above submitted legal position, the assessee submits ground- wise submissions as follows:- 5(a) The First and Second Ground of appeal, challenge the action of the ld. AO in holding that whatsapp messages contained in the Mobile No. 99502 00007 found from the assessee relating to alleged transactions are of the appellant and are real transaction. (b) Facts of the case : During the course of search proceedings, the Mobile No. 9950200007 of the assessee was seized and the print out of Whatsapp chattings were taken by the search team and on the basis of said whatsapp chattings, the ld. AO made addition of Rs. 24,20,366/- to the declared income of the assessee. The details/narration of the said chatting/messages are as follows:-

13 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 4(ii)(a) Annexure AS, Exhibit 3 page 11 “ Total Dollar 21051 cash Rs. 10.31, Ok dear.” The Department calculated total amount Rs. 13,89,366/- i.e. US $ 21051 @ Rs. 66/- per US $ on account of the said message.

(c) Action of the A.O. The AO in his impugned order held that in case of said whatsapp chattings provisions of section 132(4A) are applicable and accordingly he is of the opinion that the whatsapp messages are true and correct. The AO has considered every message as a separate message and interpreted the chattings as favourable to him without considering the fact that some messages are co-related (duplicate of each other). For ready reference, sake of convenience and better understanding and explaining the issue involved, the said messages and finding of the ld. AO are reproduced herein below :- “1.5. Annexure AS, Exhibit-3 Page No. 11. The Page contains whatsapp chat wherein assessee replied “Total dollar 27051 cash rs. 10.31”, perusal of this message and previous message shows that assessee has made payment of USD 21051 and Rs. 10,31,000 to someone at Orchard Park Suites, Orchard Turn Behind Takasimaya. The recipient also affirmed to the above message by replying “Ok dear”. Since, 1 USD was equivalent to INR 66, total USD 21051 will be INR 13,89,366. Apart from dollar there is reference of Rs. 10,31,000. Thus total of cash transaction comes to Rs. 24,20,366/-. Further, the source of Rs. 24,30,366/- transferred was not found recorded in books of account furnished by the assessee. From the entirety of circumstances and factual matrix of the case it is clearly evident that Rs. 24,20,366/- is transferred out of unexplained money and thus the same is liable to be taxed in terms of the provisions of section 69A of the Act.” As per above particulars of the whatsapp message, it was for US $ 21051 equivalent to Indian currency amounting to Rs. 10.31 lacs i.e. only for one transaction and not of two as interpreted by the ld. AO. After that the message is “OK dear”. The place of transaction is Orchard Park Suites, Orchard Turn Behind Takasimaya.

The ld. AO drawn inference that the assessee has paid US $ 21051 equivalent to Indian Rs. 13,89,366/- and he also drawn inference that besides US $ an amount of Rs. 10,31,000/- was also paid by the assessee. Accordingly, he made total addition of ( Rs. 13,89,366 + Rs. 10,31,000) Rs. 24,20,366/- on account of the above said whatsapp message to the declared income of the assessee.

c(i) In this connection the assessee further submits that the action of the ld. AO is

14 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT grossly wrong and bad in law, as he made the impugned addition without any supporting corroborative evidences and enquiry from the concerned person, as the Mobile number of the other person was available with the said whatsapp message. As per above facts, it is apparent and evident that the ld. AO made the impugned addition on the basis of presumption, surmises and conjectures. In this regard it is further submitted that now it is a settled position of law that no addition can be made on the basis of presumption only. The assessee relies on the following decisions:- a. Principal CIT Central-1 vs. Hasan Ali Khan (2021) 124 taxmann.com 209 (SC) “Section 132 of the Income-tax Act, 1961 – Search and seizure – General (documents seized in search) – Assessment year 2000-01 – Pursuant to search at asessee’s residence addition of Rs. 793 lakhs was made on account of certain undisclosed payment made by assessee – Tribunal deleted addition stating that payment by assessee of amount of Rs. 793 lakhs had not been established – High Court by impugned order dismissed appeal, holding that entire issue being based on appreciation of evidence on record, no question of law arose for consideration – Whether Special Leave Petition against said impugned order was to be dismissed – Held, yes (para 2)(in favour of assessee)” b. Commissioner of Income-tax vs. Jeet Construction Company (2021) 124 taxmann.com 527 (SC) “Section 69A, read with sections 158BC and 158BD, of the Income-tax Act, 1961 – Unexplained money (Search) – Block period 1997-98 to 2003-04 – Assessee was a partnership firm engaged in business of civil construction – Pursuant to search at residential premises of working partner of firm and at business premises of firm Assessing Officer made additions to income of assessee – Tribunal had recorded a finding in regard to additions made by Assessing Officer which was confirmed by Commissioner (Appeals), which was based only on mere assumption and not on any material recovered during search and seizure – High Court by impugned order held that in absence of supporting evidence, additions based merely on presumption that asse4ssee had earned undisclosed income and incurred expenses outside books of account would not be sustainable – Whether Special Leave Petition against said impugned order was to be dismissed – Held, yes (para 2) (in favour of assessee).” c. 278 Taxman 293 (SC) It is evident that the assessee’s case is completely covered by the issue decided by the Hon’ble Apex Court in the above said cases. The assessee further submits that he made no alleged payment of dollars to any person(s). It is, therefore again

15 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT

requested that the impugned addition made by the ld. AO is wrong, bad in law and deserves to be deleted. Without prejudice to above, the assessee also submits (though he does not accept for a moment) that the working of addition of Rs. 24,20,366/- is also not correct. The correct amount works out to Rs. 10,31,000 = $ 21051. But the ld. AO in his assessment order has added Indian Rs. 10,31,000/- mentioned in the message and also worked out the value of $ 21051 by applying the Indian currency rate of Rs. 66/- per US Dollar on date of search and again made an addition of Rs. 13,89,366/- totaling Rs. 24,20,366/-. Thus he has made double addition for one transaction i.e. one for Indian rupees calculated by the assessee as per message and another on account of US Dollar. Therefore the addition of Rs. 13,89,366/- is apparently a duplicate addition which is wrong and unwarranted. In view of the above facts, the addition, if any, to be made works out to Rs. 10,31,000/- . The facts are also evident and verifiable from the assessment order itself. Vide para 105 page 6 of his order, the AO has only drawn the inference that “apparent from the dollar there is reference of Rs. 10,31,000/-. Thus the cash transaction comes to Rs. 24,20,366/-.” The above said findings of the AO confirms the assessee’s version that the transaction was only for $ 21051 equivalent to Rs. 10,31,000/-. It is, therefore, requested that the duplicate addition made by the AO is wrong and bad in law. The assessee prays to your good-self for relief accordingly.”

assessee also submitted following judgment :

S. Name of Case Name of Court Date of order Page No. No. 1 ACIT, Central Circle-1, vs. Shri ITAT Visakhapatnam 23-09-2020 1-15 Manchukonda Shyam Prop. Bench Manchukonda Shyam 2 Mr. A. Johnkumar vs. DCIT, Central ITAT Chennai Bench 13-05-2022 16-45 Circle-1(4), Chennai 3 Atul Tantia vs. DCIT, Central Circle- ITAT Kolkata 28-03-2023 46-57 3(1), Kolkata Bench

16 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 8.1 The ld. AR of the assessee in addition to the above written

submission submitted that the assessee is a individual and earning as

employee of the bank. He has not maintained any books of account.

Pursuant to the search at Kiran Fine Jeweler group the assessee was

covered. The ld. AR submitted that in the search no incriminating material

or cash found only the whatsapp chat recovered from the mobile phone no.

99502 00007 belonging to him. The decision relied upon by the ld. CIT(A)

in the case of Ambalal Sarabhai in fact used against the assessee but it is

in fact favours the assessee. The ld. AR of the assessee submitted the

page wise explanation furnished to the ld. AO and requested to consider

the same so as to decide the issue. The page wise explanation furnished is

also reiterated here in below :

17 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT

18 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 9. The ld DR is heard who has relied on the findings of the lower

authorities. The ld.DR further submitted that the records are the electronic

records and there cannot be watertight evidence then the evidence found

from the persona mobile whatsapp chat. It is not under dispute that the

print out were taken from the whatsapp image and that was confronted

before the assessee. The case law cited are on difference facts and are not

directly applicable to the facts of the case on hand. Considering the

provision of the Information Technology Act the evidence are incriminating

in nature and the assessee explanation which are verified with the record

are not subject matter of dispute and the addition made are those chats

which are not properly explained by the assessee and are related to the

hawala transaction done by the assessee for which no proper explanation

furnished by the assessee. All the papers based on which the additions

were made are clinching evidence are clearly of the nature of unrecorded

and undisclosed transactions and the explanation are cryptic. Even the

assessee on these charts given the acknowledgment and in that situation

how can it be considered dump documents. All the person with whom the

charts are found are known to the assessee and he has not denied to any

of the transaction so confronted to the assessee and the ld. AO was fair to

19 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT considered which are recorded and found in the bank statement placed on

record and the addition is made only for those chats which are not clearly

explained by the assessee. Since all the chats are related to speaking and

live transaction and no where the assessee denied having the chart not a

live and even those transactions explained were not disputed by the ld. AO.

On all the transation the ld. AO has considered the explanation of the

assessee partly only on the issue which are not explained has been added

as income of the assessee. Based on these arguments the ld. DR prayed to

sustain the addition as there is no merits on the explanation furnished by

the assessee.

placed on record. The brief facts of the case is that the assessee was

considered as the members of Kiran Fine Jewellers Group upon which

search was conducted on 02.08.2017. While in search proceeding

WhatsApp message from Mobile No. 99502 00007 were retrieved and

printouts were taken and inventorised as Annexure AS, Exhibit -3 page no.

1 to 31. Based on the print out of the WhatsApp chat / image the ld. AO

issued a query letter cum show cause notice [ SCN ] to the assessee vide

letter dated 04.09.2019 to explain the nature and source of such

transactions. In response to the said SCN, the assessee submitted that

20 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT WhatsApp message in the mobile no. of a person does not mean that the

said message pertains to the assessee as phone may be used by other

person in the absence of owner. The assessee further contended that

noting in the message are deaf and dump. The ld. AO considered the reply

of the assessee partly and to the extent where no specific explanation was

offered were considered as unexplained and thus made an addition of Rs.

24,20,366/- under section 69 of the IT Act, 1961 based on the Whatsapp

messages contained in the Mobile No. 99502 00007. The amount of

24,20,366/- consist of 21051 dollar [ 21051 * 66=13,89,366 ] plus Rs.

10,31,000/- written as cash thus become Rs. 24,20,366/- [ 13,89,366 plus

10,31,000/- ]. The ld. AR of the assessee submitted that neither this chat

pertain to the assessee nor to his business concerns. There is no

expenditure or investment from the side of the assessee. The ld. AR of the

assessee contended that it may a case that 10,31,000 is the rupee price of

the dollar exchanged to some of the group relative travelers. The ld. AO did

and that of the ld. CIT(A) did not appreciate that which there are not two

figure first of all and other part is that it neither the investment nor

expenditure it is not seems to be the helping the guest in getting the foreign

currency exchanged. The ld. AO contended that in the chat message the

recipient confirmed to have that transaction saying “ok dear” based on that

21 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT ld. 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 ld.

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 ld. CIT(A) hold that this

noting is not deaf and dump and he confirmed the action of the ld. AO. The

bench noted from the records that the ld. AO made the addition for Rs.

24,20,366/- consist of 21051 dollar [ 21051 * 66=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/- ]. The bench also noted that the ld. AO made

an addition for this amount u/s. 69A of the Act and the ld. CIT(A) confirmed

22 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT the action of the ld. AO. The provision of section 69A of the Act empowers

the ld. AO make addition of any money, bullion, jewellery or other valuable

articles and such money, bullion, 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 i.e. 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.

In terms of these observations, the appeal of the assessee in ITA no.

179/JP/2022 is allowed.

23 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 11. The fact of the case in ITA Nos. 180 & 181-JP-2022 is similar to the

case in ITA No. 179-JP-2022 and we have heard both the parties and

persuaded the materials available on record. The bench has noticed that

the issues raised by the assessee in this appeal No. ITA Nos. 180 & 181-

JP-2022 is equally similar on set of facts and grounds. Therefore, it is not

imperative to repeat the facts and various grounds raised by both the

parties. Hence, the bench feels that the decision taken by us in ITA No.

179/JP/2022 for the Assessment Year 2016-17 shall apply mutatis

mutandis in the case of Virendra Singh Ratnawat in ITA Nos. 180 & 181-

JP-2022 for the Assessment Years 2017-18 & 2018-19.

In the result, three appeals of the assessee are allowed.

Order pronounced in the open court on 01/01/2024. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 01/01/2024 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Sh.Virendra Singh Ratnawat, Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-02, Jaipur vk;dj vk;qDr@ The ld CIT 3. vk;dj vk;qDr¼vihy½@The ld CIT(A) 4.

24 ITA Nos. 179 to 181/JP/2022 Virendra Singh Ratnawat vs. ACIT 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA Nos. 179 to 181 /JP/2022) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत