The addition against me rests on a WhatsApp chat found on someone else's phone in his search, and on his statement under s.132(4). Does the presumption in s.132(4A) and s.292C apply to me?
No. The presumption runs against the person from whose possession or control the material was found, not against a third party named in it. Without corroborative material the assessee is not even required to explain the contents, and the Rs 4 crore on-money addition was deleted.
Decided by the ITAT (Sudhir Kumar, Judicial Member and Manish Agarwal, Accountant Member (Delhi 'A' Bench)) on 2026-07-08, reported as ITA No. 1803/Del/2026, assessment year 2021-22 (ITAT Delhi). It bears on section 132(4A), section 292C, section 132(4), section 143(3), section 132 of the Income Tax Act 1961, in Search, Survey & Block Assessment, Evidence & Burden of Proof and Assessment & Scrutiny matters.
This is the answer to a very large class of additions: the diary, the WhatsApp chat, the Excel sheet or the Tally file seized from A, plus A's statement under s.132(4), used to tax B. The Tribunal here separates the two legs cleanly — the documentary presumption under s.132(4A) read with s.292C does not reach a third party, and a statement standing alone without corroboration cannot carry an addition. The case is unusually useful because cross-examination was in fact allowed and the witness changed his stand under it, which is what happens more often than not, and because the Tribunal held the Assessing Officer to the arithmetic: the witness had spoken of a total consideration of Rs 13.50 crore while the registered deed showed Rs 9 crore, leaving Rs 50 lakh unreconciled against the Rs 4 crore actually added, and the Assessing Officer never explained the gap. The limit of the decision is equally clear: the presumption is displaced, not the evidence. Corroborative material found elsewhere, or admissions by the assessee, would change the result. The regime point: the search was on 15 January 2021 in the case of a third-party group, so this falls in the s.153A/s.153C regime for searches initiated between 1 June 2003 and 31 August 2024. The assessment itself was framed under s.143(3) on 9 May 2022, not under s.153C, and the Tribunal did not need to reach the assessee's legal grounds because it deleted the addition on merits.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a limited liability partnership in real estate development. It sold the basement and ground floor of W-15, Greater Kailash-1, New Delhi to Shri Manish Wadhwa and Ms Mamta Wadhwa for Rs 9 crore under a registered sale deed. A search under s.132 was carried out on 15 January 2021 in the case of the M/s Blomstrende Buildwell Pvt Ltd group. Digital data seized from the mobile phone of Shri Amit Chauhan, inventoried as Annexure A-1, contained chats between him and Shri Manish Wadhwa about the property and about a loan transaction involving a partner of the assessee firm. In his statement under s.132(4) Shri Amit Chauhan said the actual consideration for the property was Rs 13.50 crore and that Rs 4 crore had been paid in cash by the buyers. On that basis the Assessing Officer added Rs 4 crore in the hands of the assessee LLP by an assessment order dated 9 May 2022 under s.143(3), assessing income at Rs 5,32,05,340. Cross-examination of Shri Amit Chauhan was allowed on 12 July 2021, at which he changed his stand, saying he had been appointed by one Shri Gagan, had not been directly involved in the transaction and had only been present when the deed was registered, and speaking of an agreement to sell at Rs 13.50 crore that had been torn up on the date of registration. No evidence of that agreement and no particulars of any cash payment were produced. Nor did the figures reconcile: Rs 9 crore in the deed plus Rs 4 crore added comes to Rs 13 crore, not the Rs 13.50 crore he spoke of, and the Rs 50 lakh difference was never explained.
The appeal was allowed and the addition of Rs 4 crore was deleted (paras 18 and 20). The WhatsApp chat having been found in the possession of a third party, the presumption under s.132(4A) is available against the person who made the statement and, where it is sought to be used against a third party, is rebuttable; it cannot be used against an assessee who is a third party without corroborative material, and such an assessee is not required to explain the contents of the document or of the statement (para 13). An addition made solely on the strength of that statement, with no corroborative material and with an unreconciled difference in the figures the maker himself gave, cannot stand (para 17). Having decided the merits, the Tribunal treated the legal grounds as academic and did not adjudicate them (para 19).
The Tribunal first tested the statement. Under cross-examination Shri Amit Chauhan resiled from direct involvement, produced no evidence of the torn agreement and gave no particulars of any cash payment, and the Assessing Officer had made no attempt to reconcile the Rs 50 lakh discrepancy between the witness's figure and the amount added (para 12). It then addressed the document. The chat was found on a third party's device; s.132(4A) raises its presumption against the maker, and against a third party it is at most rebuttable and cannot be applied without corroboration, so no burden of explanation fell on the assessee (para 13). No corroborative evidence of any on-money receipt had been brought on record (para 14). The Tribunal adopted the reasoning of the Hyderabad Bench in SVS Projects India Private Limited v. ACIT, which had held that where documents are found from the premises of a third party the rebuttable presumption under s.132(4A) and s.292C is not applicable and the Assessing Officer must support the addition with further corroborative evidence, relying in turn on the Gujarat High Court in PCIT v. Gaurang Bhai Pramod Chandra Upadhyay for the proposition that no presumption under s.132(4A) read with s.292C can be drawn against an assessee from whose premises the documents were not recovered (para 15). It further applied the Delhi Bench decision in Maple Destinations and Dreambuild Pvt Ltd v. DCIT, where an addition made in the teeth of a registered sale deed, on retracted witness statements and without cross-examination or corroboration, was deleted (para 16). Applying all of this, the addition rested solely on the statement and had to go (paras 17 and 18).
In terms of section 132(4A) of the Act, the presumption is available against the person who made such statement and is rebuttable in case where the same are used against any 3rd party. Such presumption cannot be used against the assessee who is the third party without bringing any corroborative material on record and the assessee is not required to explain the contents of the documents in the shape of WhatsApp chat found or the so-called statements.
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Handle my notice → Ask a CA on WhatsAppNo. The presumption runs against the person from whose possession or control the material was found, not against a third party named in it. Without corroborative material the assessee is not even required to explain the contents, and the Rs 4 crore on-money addition was deleted. This was decided by the ITAT (Sudhir Kumar, Judicial Member and Manish Agarwal, Accountant Member (Delhi 'A' Bench)) and bears on section 132(4A), section 292C, section 132(4), section 143(3), section 132 of the Income Tax Act 1961. It is reported as ITA No. 1803/Del/2026, assessment year 2021-22 (ITAT Delhi). This is the answer to a very large class of additions: the diary, the WhatsApp chat, the Excel sheet or the Tally file seized from A, plus A's statement under s.132(4), used to tax B. The Tribunal here separates the two legs cleanly — the documentary presumption under s.132(4A) read with s.292C does not reach a third party, and a statement standing alone without corroboration cannot carry an addition. The case is unusually useful because cross-examination was in fact allowed and the witness changed his stand under it, which is what happens more often than not, and because the Tribunal held the Assessing Officer to the arithmetic: the witness had spoken of a total consideration of Rs 13.50 crore while the registered deed showed Rs 9 crore, leaving Rs 50 lakh unreconciled against the Rs 4 crore actually added, and the Assessing Officer never explained the gap. The limit of the decision is equally clear: the presumption is displaced, not the evidence. Corroborative material found elsewhere, or admissions by the assessee, would change the result. The regime point: the search was on 15 January 2021 in the case of a third-party group, so this falls in the s.153A/s.153C regime for searches initiated between 1 June 2003 and 31 August 2024. The assessment itself was framed under s.143(3) on 9 May 2022, not under s.153C, and the Tribunal did not need to reach the assessee's legal grounds because it deleted the addition on merits. If it applies to you, the first step is this: Establish on the record whose premises or device the document came from. If it was not yours, say so in terms and put the Panchnama or seizure inventory on record; the presumption in s.132(4A) and s.292C is keyed to possession or control.
The assessee is a limited liability partnership in real estate development. It sold the basement and ground floor of W-15, Greater Kailash-1, New Delhi to Shri Manish Wadhwa and Ms Mamta Wadhwa for Rs 9 crore under a registered sale deed. A search under s.132 was carried out on 15 January 2021 in the case of the M/s Blomstrende Buildwell Pvt Ltd group. Digital data seized from the mobile phone of Shri Amit Chauhan, inventoried as Annexure A-1, contained chats between him and Shri Manish Wadhwa about the property and about a loan transaction involving a partner of the assessee firm. In his statement under s.132(4) Shri Amit Chauhan said the actual consideration for the property was Rs 13.50 crore and that Rs 4 crore had been paid in cash by the buyers. On that basis the Assessing Officer added Rs 4 crore in the hands of the assessee LLP by an assessment order dated 9 May 2022 under s.143(3), assessing income at Rs 5,32,05,340. Cross-examination of Shri Amit Chauhan was allowed on 12 July 2021, at which he changed his stand, saying he had been appointed by one Shri Gagan, had not been directly involved in the transaction and had only been present when the deed was registered, and speaking of an agreement to sell at Rs 13.50 crore that had been torn up on the date of registration. No evidence of that agreement and no particulars of any cash payment were produced. Nor did the figures reconcile: Rs 9 crore in the deed plus Rs 4 crore added comes to Rs 13 crore, not the Rs 13.50 crore he spoke of, and the Rs 50 lakh difference was never explained. The matter was decided on 2026-07-08 by the ITAT (Sudhir Kumar, Judicial Member and Manish Agarwal, Accountant Member (Delhi 'A' Bench)). On those facts the ITAT held as follows. The appeal was allowed and the addition of Rs 4 crore was deleted (paras 18 and 20). The WhatsApp chat having been found in the possession of a third party, the presumption under s.132(4A) is available against the person who made the statement and, where it is sought to be used against a third party, is rebuttable; it cannot be used against an assessee who is a third party without corroborative material, and such an assessee is not required to explain the contents of the document or of the statement (para 13). An addition made solely on the strength of that statement, with no corroborative material and with an unreconciled difference in the figures the maker himself gave, cannot stand (para 17). Having decided the merits, the Tribunal treated the legal grounds as academic and did not adjudicate them (para 19).
The Tribunal first tested the statement. Under cross-examination Shri Amit Chauhan resiled from direct involvement, produced no evidence of the torn agreement and gave no particulars of any cash payment, and the Assessing Officer had made no attempt to reconcile the Rs 50 lakh discrepancy between the witness's figure and the amount added (para 12). It then addressed the document. The chat was found on a third party's device; s.132(4A) raises its presumption against the maker, and against a third party it is at most rebuttable and cannot be applied without corroboration, so no burden of explanation fell on the assessee (para 13). No corroborative evidence of any on-money receipt had been brought on record (para 14). The Tribunal adopted the reasoning of the Hyderabad Bench in SVS Projects India Private Limited v. ACIT, which had held that where documents are found from the premises of a third party the rebuttable presumption under s.132(4A) and s.292C is not applicable and the Assessing Officer must support the addition with further corroborative evidence, relying in turn on the Gujarat High Court in PCIT v. Gaurang Bhai Pramod Chandra Upadhyay for the proposition that no presumption under s.132(4A) read with s.292C can be drawn against an assessee from whose premises the documents were not recovered (para 15). It further applied the Delhi Bench decision in Maple Destinations and Dreambuild Pvt Ltd v. DCIT, where an addition made in the teeth of a registered sale deed, on retracted witness statements and without cross-examination or corroboration, was deleted (para 16). Applying all of this, the addition rested solely on the statement and had to go (paras 17 and 18). In the words reproduced by the source cited on this page: "In terms of section 132(4A) of the Act, the presumption is available against the person who made such statement and is rebuttable in case where the same are used against any 3rd party. Such presumption cannot be used against the assessee who is the third party without bringing any corroborative material on record and the assessee is not required to explain the contents of the documents in the shape of WhatsApp chat found or the so-called statements." The decision followed or applied SVS Projects India Private Limited v. Assistant Commissioner of Income-Tax (ITAT Hyderabad) — followed; PCIT v. Gaurang Bhai Pramod Chandra Upadhyay (Gujarat High Court) — relied upon through SVS Projects; Maple Destinations and Dreambuild Pvt. Ltd. v. DCIT, [2024] 162 taxmann.com 156 (Del. Trib.) — followed.
It was decided by the ITAT on 2026-07-08 and is reported as ITA No. 1803/Del/2026, assessment year 2021-22 (ITAT Delhi). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 132(4A), section 292C, section 132(4), section 143(3), section 132, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed and the addition of Rs 4 crore was deleted (paras 18 and 20). The WhatsApp chat having been found in the possession of a third party, the presumption under s.132(4A) is available against the person who made the statement and, where it is sought to be used against a third party, is rebuttable; it cannot be used against an assessee who is a third party without corroborative material, and such an assessee is not required to explain the contents of the document or of the statement (para 13). An addition made solely on the strength of that statement, with no corroborative material and with an unreconciled difference in the figures the maker himself gave, cannot stand (para 17). Having decided the merits, the Tribunal treated the legal grounds as academic and did not adjudicate them (para 19). It arises in Search, Survey & Block Assessment, Evidence & Burden of Proof and Assessment & Scrutiny matters, on section 132(4A), section 292C, section 132(4), section 143(3), section 132 of the Income Tax Act 1961, and was decided by Sudhir Kumar, Judicial Member and Manish Agarwal, Accountant Member (Delhi 'A' Bench). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Then put the Assessing Officer to proof of corroboration. Ask what independent material links you to the entry, beyond the document and the maker's statement. Ask for cross-examination of the person whose statement is used, and prepare the arithmetic first. Here the witness's own figures did not add up and the gap was never reconciled. Lead the registered sale deed or the primary document of the transaction. The Tribunal treated the registered deed as the best evidence of consideration in the absence of anything credible to the contrary. Do not let the Assessing Officer shift the burden of explaining someone else's document onto you; the Tribunal held in terms that the assessee is not required to explain the contents of the chat or the statement. Keep the merits ground and the jurisdictional ground separate. The Tribunal decided the merits and left the legal grounds unadjudicated as academic, so a bare jurisdictional plea may leave you with nothing if it fails.
Validity check could not be completed. Validity check could not be completed. The order is dated 8 July 2026 and no search was made for a Revenue appeal under s.260A against it. Note that the Gujarat High Court decision in Gaurang Bhai Pramod Chandra Upadhyay and the Hyderabad Bench decision in SVS Projects were read only as extracted in this order and were not independently retrieved. Correction to the regime statement elsewhere in this entry: the s.153A and s.153C regime does not run to 31 August 2024. Date scope: by the closing limb of s.153A(1) that section reaches only a search initiated, or a requisition made, after 31 May 2003 and on or before 31 March 2021, and s.153C is excluded by its own sub-section (3) from any search initiated on or after 1 April 2021, so this entry is authority for a search within that window and says nothing about a later one — a search initiated between 1 April 2021 and 31 August 2024 is governed instead, by force of s.152(3), by ss.147 to 151 as they stood immediately before the Finance (No. 2) Act 2024, and a search initiated on or after 1 September 2024 by the substituted Chapter XIV-B. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read twice from the same URL, the second read aimed at named paragraph numbers, and the two readings of paras 12 to 20 agree. The printed text carries indiankanoon's inline hyperlink markup around section numbers, so 'section 132(4A)' appears in the source as a bracketed link; the quote reproduces the words without the markup and changes nothing else. Two inconsistencies in the order have been left as they are: at para 12 the person who attended the cross-examination is called 'Shri Amit Channa' whereas para 2 names the partner as 'Shri Rajeev Channa'; and para 19 refers to grounds regarding 'initiation of the proceedings u/s 143(3)'. The order does not state whether s.153C was invoked at any stage; the assessment as recorded was framed under s.143(3) and dated 9 May 2022. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed and the addition of Rs 4 crore was deleted (paras 18 and 20). The WhatsApp chat having been found in the possession of a third party, the presumption under s.132(4A) is available against the person who made the statement and, where it is sought to be used against a third party, is rebuttable; it cannot be used against an assessee who is a third party without corroborative material, and such an assessee is not required to explain the contents of the document or of the statement (para 13). An addition made solely on the strength of that statement, with no corroborative material and with an unreconciled difference in the figures the maker himself gave, cannot stand (para 17). Having decided the merits, the Tribunal treated the legal grounds as academic and did not adjudicate them (para 19).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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