Unexplained asset addition fails where WhatsApp chats alone do not prove purchase, payment, or possession of jewellery.

Addition under section 69A of the Income-tax Act was held unsustainable where it was based only on WhatsApp chats and there was no corroborative evidence of actual purchase, payment, possession, or excess jewellery. The ITAT Delhi noted that the jewellery and gold found during search had already been reconciled and disclosed, and that the revenue relied only on suspicion drawn from electronic chats. As section 69A is a deeming provision requiring material to show ownership or possession of unexplained assets, the absence of supporting evidence meant the addition could not be sustained and was deleted.

---

---

Issues: Whether the addition sustained under section 69A of the Income-tax Act, 1961, based only on WhatsApp chats and without corroborative evidence of actual purchase, payment, possession, or excess jewellery, was sustainable.

Analysis: The addition rested on chats recovered from mobile phones, but no excess jewellery, invoice, bill, payment trail, or other material evidence was found to show that the assessee had in fact purchased the alleged jewellery or was in possession of unexplained money or jewellery. The Tribunal noted that the jewellery and gold found during search had been reconciled and disclosed, and that the authorities had relied only on suspicion drawn from electronic chats. Since section 69A is a deeming provision and its application requires material to show ownership or possession of unexplained assets, the absence of such evidence made the addition unsustainable.

Conclusion: The addition under section 69A was deleted and the issue was decided in favour of the assessee.

---