Summary of this article
ITAT Mumbai rejects Rs 3 crore undisclosed income claim in property deal.
Tribunal rules WhatsApp message alone is insufficient evidence for cash receipt.
Tax department failed to prove on-money beyond registered sale deed value.
Burden of proof lies on tax authorities, not on taxpayer, says ITAT.
The Income Tax Appellate Tribunal (ITAT) in Mumbai has ruled in favour of a Pune woman accused of receiving Rs 3 crore in cash in a property transaction. The tribunal held that the tax department failed to prove that any such amount was paid, according to a recent report by The Economic Times.
Dispute Over Alleged Cash Component
The dispute arose from the sale of a commercial property in Pune. The property was sold for Rs 3.38 crore. This figure was mentioned in the registered sale deed and accepted for stamp duty.
During the assessment, the income tax department claimed that the actual sale value was higher. It is alleged that the seller had received an additional Rs 3 crore in cash.
1 January 2026
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The claim was based on a WhatsApp message found during proceedings. The message was exchanged between the buyer’s son and his accountant. It referred to a higher amount while discussing the transaction.
Relying on this message, the assessing officer treated Rs 3 crore as undisclosed income and added it to the seller’s taxable income.
Tribunal Finds No Supporting Evidence
The taxpayer objected to the addition. She stated that she was not part of the WhatsApp conversation. She also said that the message had nothing to do with her or the sale agreement. According to her, the property was sold strictly at the value mentioned in the registered documents.
The tribunal examined the record and found that the department had no supporting material. There was no document, no receipt, and no financial trail to show that any cash had been received.
The WhatsApp message, the tribunal noted, was a third-party exchange. It did not involve the seller. It was not part of the transaction paperwork. No further evidence was produced to back the allegation.
The bench also noted that the declared sale price was in line with the stamp duty valuation applicable at the time of sale.
In its order, the tribunal said that a WhatsApp message, by itself, cannot be treated as proof of undisclosed income. Allegations must be supported by evidence.
The tribunal held that the burden of proof lies with the tax department. Since no proof was produced, the addition could not be sustained.
The order reiterates that tax demands cannot be raised on suspicion alone. Without evidence, no addition can be made.
