INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI C. N. PRASAD, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 3505/Del/2023 (Assessment Year: 2018-19)

Kailash Gahlot, Vs. DCIT, C-6/6172, Vasant Kunj, Central Circle-4, New Delhi Delhi (Appellant) (Respondent)

PAN:AAJPG2849N Assessee by : Shri Vinod Bindal, CA Ms. Rinky Sharma, AR Revenue by: Mr. Waseem Arshad, CIT DR Date of Hearing 05/07/2024 Date of pronouncement 08/07/2024 O R D E R PER M. BALAGANESH, A. M.:

1. The appeal in ITA No.3505/Del/2023 for AY 2018-19, arises out of the order of the Commissioner of Income Tax (Appeals)-23, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 23/10259/2017-18 dated 27.10.2022 against the order of assessment passed u/s 153A r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.04.2021 by the Assessing Officer, DCIT, Central Circle-4, Delhi (hereinafter referred to as ‘ld. AO’).

2. The only issue to be decided in this appeal is as to whether the ld CIT(A) was justified in upholding the addition made on account of unexplained money in the sum of ₹5 lakhs u/s 69A r.w.s 115BBE of the Act in the facts and circumstances of the instant case.

3. A search and seizure action u/s 132 of the Act was carried out in M/s. Corporate International Financial Services Ltd and others Group and its associates on 10.10.2018. The assessee was also covered pursuant to a separate warrant of authorization u/s 132 of the Act issued to him on 10.10.2018. During the course of Income Tax search, a WhatsApp chat dated 01.04.2017 was found in the mobile phone of the assessee between the group of some lawyers including the assessee, wherein, one Mr. Ricky Gupta, Advocate, sent a message stating as under:-

"Kailash bhai. An update on fees received as on date. Rs 50,000/- in cash paid by Mr Sukhbir Singh, Rs 2,00,000/- in cash paid on 24/03, Rs 2,00,000/- in cash paid on 27/03. A cheque in the sum of Rs 50,000/- issued by Ms Alka Lamba has been handed over. This cheque will be presented in next week. As such a total of Rs 5,00,000/- subject to clearance of cheque has been received so far for all of us.”

4. Advocate Manish Vashisht replied to the message stating as under:- "This is still very very low and less. I remember invoice was for 40 after adjusting the amount of Kailash bhai". So 35 still to come Kailash bhai AAP kuch Karen".

5. During the course of assessment proceedings, the assessee was requested to provide explanation with respect to cash receipts from different persons by Mr. Ricky Gupta on his behalf and also the pending amounts to be paid to Manish Vashisht during the year under consideration and the assessee was also show caused as to why in the absence of satisfactory reply, the total amount as mentioned in the Whatsapp Chat should not be added back to the total income of the assessee as unaccounted cash made during the year under consideration. The assessee clearly replied that the said WhatsApp chat messages were exchanged between a group of lawyers with regard to payment of fees to the advocate in connection with the case relating to disqualification of MLAs pending before the Hon’ble Delhi High Court. It was categorically submitted that the assessee in the capacity of a lawyer by profession as well as an MLA of AAP party had assisted the party in this matter and accordingly was part of the group chat in the WhatsApp group and was not involved monetarily on this issue.

6. The Ld AO however, did not heed to the aforesaid contentions of the assessee and concluded from the WhatsApp message, which emerges that Mr Ricky Gupta and Manish Vashisht advocates work on behalf of the assessee and they collected the fee of ₹5 lakhs (including 4.5 lakhs cash and Rs. 50,000/- by cheque on behalf of the assessee) and further requested the assessee to look into the matter for the further pending payment of ₹35 lakhs. The ld AO further applied the presumption in terms of Section 1