SIDIQUE IBRAHIM ALLANA,OPP. JAIN VISVADI JAIN HOPSITAL,HOSPITAL ROAD, V. ASST. COMMI. OF INCOME TAX(INTERNATIONA TAXATION0, RAJKOT

ITITA 73/RJT/2025

AI Insights

The case involves Sidique Ibrahim Allana, a non-resident Indian, who was accused of making an unexplained cash transaction of Rs. 5,50,00,000 during the financial year 2012-13, relevant to the assessment year 2013-14. The transaction was identified through digital data seized during a search operation on another individual, Mansur Mehta. The Assessing Officer reopened the assessment under section 147 of the Income Tax Act and made the addition under section 69, treating it as unexplained investment. The Dispute Resolution Panel (DRP) upheld the addition, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the reassessment and the addition, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669068 (ITAT-RAJKOT)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Other Referred Cases: CBI v. V. C. Shukla, Common Cause v. UOI, K. P. Varghese v. ITO, CIT v. D.K. Gupta, Amarjit Singh Bakshi (HUF) v. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PUNGLIA
• Assessee Lawyers: R.D. LALCHANDANI
• Keywords: Reassessment proceedings; Corroborative evidences; Unexplained investment; Income from undisclosed sources; Reopening of assessment; Principle of natural justice; Search and seizure; Loose papers
• Section: 147; 148; 142(1); 132; 69; 5(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./IT(IT)A No.73/RJT/2025 (Ǔनधा[रण वष[ / Assessment Year: 2013-14) Sidique Ibrahim Allana, C/O Ismail Allana, Opposite, Jain Visavadi Jain, Hospital Road, Veraval, (Gujarat)-362265 Vs. Assistant Commissioner of Income Tax (International Taxation), Rajkot-360001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABPPA8774R (Appellant) (Respondent) Appellant by : Shri R.D. Lalchandani, AR Respondent by : Shri Sanjay Punglia, CIT DR Date of Hearing : 03/06/2025 Date of Pronouncement : 23/06/2025 आदेश / O R D E R Per, Dr. A. L. Saini, AM: Captioned appeal filed by the Assessee, pertaining to assessment year (A.Y.) 2013-14, is directed against the final assessment order passed by the Assessing Officer, dated 31.12.2024, after incorporating the directions of the Dispute Resolution Panel (in short “DRP”), vide DRP order dated 29.11.2024, under section 144C(5) of the Act. 2. The grounds of appeal raised by the assessee are as follows: “1.The Assessing Officer erred in reopening the assessment by issue of notice u/s 148 of the Act. The reopening of the assessment was barred by limitations of time. 2.The Assessing Officer erred in reopening the assessment by issue of notice u/s. 148 of the Act. The reopening of the assessment was beyond the scope of the powers of the Assessing Officer. Page | 2 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana 3.Without prejudice to ground no. 1 and 2, the Assessing Officer erred in making an addition of Rs. 5,50,00,000 (Rs. Five Crores Fifty Lakhs) to the income under the provisions of section 69 of the Act.” Facts of the Assessee`s case: 3. Succinctly, the factual panorama of the case is that assessee before us is an Individual. The assessee is NRI (non- resident) and residing at UAE, outside India.The assessee has not filed return of income for the assessment year ( AY) 2013-14. Information was flagged on Insight Portal, in accordance with the Risk Management Strategy, formulated by CBDT relevant to assessment year (AY) 2013- 14, whereupon a search & seizure of operation on Rajiv Saxena Group of companies and others was conducted on 30/09/2021. During the search and seizure action, certain incriminating data, in the form of digital data, containing details of unaccounted cash transaction between Mansur Mehta & others were found and seized from the residential premise of Shri Mansur Mehta, (who was also covered u/s 132 at premise C wing 3003. Raneja Viviera, Sane Guruji Road, Mumbai Central, Mumbai). Digital Data Backup of these devices were taken and the same were seized and inventoried as Annexure A1 A2 and A3. As per assessing officer, these incriminating documents pertain to or the information contained therein relates to the assessee and the assessee has been identified through the WhatsApp chat /e-mail communications found in the digital devices of Shri Mansur Mehta, who deal with him in cash transactions. In the email, Shri Mansur Mehta has sent some images that contain hand written notes with some calculations of money, as on 01.12.2012, with the assessee. Therefore, by following the due procedure, as per section 148A of the Act, the assessee`s case was reopened u/s 147 of the Act and a notice u/s 148 of the Act, was issued on 31/03/2023, requiring the assessee to file return of income, within 30 days from the Page | 3 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana receipt of notice. The assessee, did not file Return of Income (ROI) for the assessment year (AY) 2013-14, as required by notice u/s 148 of the Act. Thereafter, notice(s) u/s. 142(1) of the Act, were issued through ITBA Module, calling certain information/details in respect of reason(s) on which the case was reopened u/s 147 of the Act, which were duly served upon the assessee. 4. In response to the notice(s) generated through ITBA Module, the assessee furnished submission/reply(s), before the assessing officer, vide letter dated 11/03/2024, through e-mail, using e-filing portal for compliance of notice(s). The assessing officer observed that during the course of post search investigation, while analyzing the I-phone 12 Pro Max of Mansur Mehta, which was found and cloned during the course of search proceedings u/s 132 of the Income Tax Act 1961, at C wing 3003, Raheja Viviera, Sane Guruji Road, Mumbai Central, Mumbai on 30.09.2021. All the chats in respect of various other suspected entities identified in these whatsapp chats are attached to the report, known as Annexure -1. Further the persons have been identified through the WhatsApp chat /e-mail communications found in the digital devices of Mansur Mehta, who deal with him in cash transactions. In the email, Mansur Mehta has sent some images that contain hand written notes with some calculations of money as on 01.12.2012. The snapshots of the email and images found, were pasted by the assessing officer, in the assessment order page No.3. 5. The assessing officer noticed that Siqidue Allana has made cash transaction of Rs. 5,50,00,000/-, with Shri Mansur Mehta, for the financial year (FY) 2012-13, relevant to assessment year (AY) 2013-14. Accordingly, vide SCN dated 07/03/2024, the assessee was required to show -cause, as to why the amount of Rs. 5,50,00,000/- should not be Page | 4 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana treated, as undisclosed income from undisclosed sources and addition on account of unexplained cash transaction should not be made. 6. In response to the above show-cause notice, the assessee, vide letter dated 11/03/2024, submitted, written submission, before the assessing officer, along with documentary evidence. The assessee submitted before the assessing officer that he was not aware of any cash transactions amounting to Rs 5,50,00,000/- with Mr. Mansur Mehta, and he has never paid any such cash amount to Mr. Mehta. The assessee has been provided with certain material, which is claimed to be seized by the Department, from the premises of Mr. Mehta, the said document just contains, assessee`s name and against name a figure 550/-, is stated. The assessee stated that he did not know, who has created said document. The assessee further stated that such document is merely a loose sheet of paper, containing hand written data and the contents written in such paper are completely vague and unclear as to what the creator of this paper wants to convey. The assessee also submitted that the said document/loose sheet of paper has been found by the department, from the email of Mr. Mehta (as mentioned in the seized data itself), and the evidence found from the email of a third party, is not an admissible, evidence in the eyes of law. The assessee also submitted that he had no dealings, whatsoever in India. The assessee had never done any business in India. The assessee is a non-resident in India, therefore, he is not liable to tax in India. The assessee stated that he lived in the UAE, since the year 1995, and as per section 5(2) of the Income Tax Act, 1961, an income of a non-resident, is not taxable, if such income, is not received or accrued or arised in India. Since, assessee had no income that is received or accrued or arose in India, hence he is not liable for payment of any taxes in India. The assessee also explained the provisions of section 5(2) of the Act, which is reproduced below: Page | 5 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana “ (2) Subject to the provisions of this Act, the total income of any previous year of a person, who is a non-resident, includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to him in India during such year.” The assessee also submitted, a copy of his passport, before the assessing officer, to demonstrate the period during which assessee had been in India. Findings of the assessing officer: 7. However, the Assessing Officer rejected the above contention of the assessee and observed that the seized material clearly indicate cash transaction of Rs.550/-, ( equivalent to 5,50,00,000/-) made with Mr. Mansur Mehta for investment purpose at Dubai. The assessing officer noticed that the assessee has made cash transaction of Rs. 5,50,00,000/-, during the previous year (P.Y.) relevant to assessment year (A.Y.) 2013- 14. However, the assessee has not given any convincing reply about the source of cash except saying that he has not made any such payment. The assessing officer further noted that in the income-tax proceedings, probable and preponderance are admissible in evidence. The assessing officer finally concluded that when the seized document, clearly shows that the cash receipt of Rs. 5,50,00,000/- from the assessee, then it can be safely be concluded that the assessee has paid an amount of Rs. 5,50,00,000/- for investment purpose at Dubai and such investment was managed by Mr. Mansur Mehta. As per assessing officer, the assessee failed to prove source of such cash payment of Rs. 5,50,00,000/-, the same was, therefore, treated as unexplained investment, in the hands of the assessee, u/s. 69 of the Income-tax Act. Page | 6 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana Findings of the Hon’ble DRP: 8. Aggrieved by the draft assessment order, of the Assessing Officer, framed under Section 144C(1) of the Income Tax Act, 1961, dated 11.03.2024, the assessee filed its objections, before the Dispute Resolution Panel( in brief “DRP”). Before the learned DRP, in respect of the legal issue, of challenging the reopening of the assessment, under section 147 of the Act, the assessee submitted that reopening of assessment is not justified, as the reopening of assessment, was barred by limitation of time, therefore, reassessment proceedings, may be quashed. However, the learned DRP noticed that assessee has challenged the validity of the draft assessment order on account of legal issue, which is not tenable, as the assessee has not challenged this issue during the draft assessment proceedings. The learned DRP also referred the provisions of section 144C (2) of the Act, which provides for the condition of objections before the DRP. The learned DRP also referred the provisions of section 144C(8 )/144C(13) of the Act, and stated that quashing and annulment etc, are not the power of the DRP, at the draft assessment stage. The DRP is empowered to confirm, reduce or enhance, the variations proposed in the draft assessment order. Since , the DRP does not have power to quash the draft assessment order, hence ground raised by the assessee, challenging the reassessment proceedings was dismissed by the DRP. 9. On merit, the assessee submitted before the learned DRP that document/loose sheet of paper was found by the department, from the email of Mr. Mehta, as mentioned in the seized data itself, and the evidence found from the email of a third party, is not an admissible, and these are merely dump documents, therefore should not be relied on. The assessee had never Page | 7 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana done any business in India, therefore, he is not liable to tax in India, as much as the provisions of section 5(2) of the Income Tax Act, 1961, is concerned, therefore, assessee prayed before the ld DRP that addition made by the assessing officer, in the draft assessment order, may be deleted. 10. However, learned DRP, held that statements recoded u/s 132(4) of the Act during the search, are having evidential value, therefore, seized evidences cannot be termed as dump document. The assessee has made cash transaction of Rs. 5,50,00,000/- during the previous year (P.Y.), relevant to (A.Y.) 2013-14. However, the assessee has not given any convincing reply about the source of cash except saying that he has not made any such payment. In the income-tax proceedings, preponderance of probability is admissible in evidence. The learned DRP also noted in its order, vide para number 5.3.3.2 of its order, stating as follows: “Total receipt from applicant Siddique Allana is mentioned as 550 ( apparently Rs.550 lakh)”. The Ld. DRP also noted that case laws relied upon by the assessee are distinguishable in facts and circumstance, therefore, in view of the above, Ld. DRP confirmed the addition proposed u/s 69 of the Act, by the assessing officer of Rs. 5,50,00,000/-. 11. Aggrieved by the order of the Ld. DRP/AO, the assessee is in further appeal before us. Arguments of Learned Counsel for the assessee, on merit.: 12. On merit, Learned Counsel for the assessee, argued that Assessing Officer, in the first para of the draft assessment order, mentioned that Page | 8 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana assessee has not filed the return of income for the assessment year (A.Y.) 2013-14. However, the real fact is that assessee has filed the return of income for A.Y. 2013-14, which is submitted by the assessee in the Paper Book Page No. 1, therefore, allegation of the Assessing Officer that assessee has not filed the return of income, is not correct. The Ld. Counsel further submitted that WhatsApp chat is not an electronic record because the said WhatsApp chat, was found by the Department, from other person`s I-phone, and it is not corroborated by any evidence. Therefore, it is a dump document, and based on such dump document, no addition should be made. The Ld. Counsel also submitted that in WhatsApp chat a figure 550/- is written, however, the assessing officer, as well as ld DRP have added five zeros and made it as Rs. 5,50,00,000/-, without any basis. The ld. Counsel further stated that figure of 550 may be construed or interpreted in a different way, as per assumption and presumption and as per personal perception of the assessing officer, as Rs. 5500/- or Rs. 55,000/- or Rs. 5,50,000/-, or Rs. 55,00,000/-, or Rs. 5,50,00,000/- or Rs. 55,00,00,000/- so and so forth. Hence, there was no basis before the assessing officer to add five zeros in the figure of 550/-, to make the amount of Rs. 5,50,00,000/-. No any statement of any third-party taken in this regard by the search team, during the course of search, under section 132(4) of the Act, says that figure of 550, should be read as Rs. 5,50,00,000/-. Hence, the addition was made by the assessing officer without any evidence, and moreover, the addition made by the assessing officer, is based merely on surmise and conjuncture, therefore, ld. Counsel contended that addition made by the assessing officer may be deleted. 13. On merit, the Ld. Counsel for the assessee further submitted that addition was made by the Assessing Officer, under Section 69 of the Act, however, the section 69 of the Act, talks about unexplained investments, Page | 9 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana and the unknown figure at 550/- in WhatsApp chat, is not an unexplained investment, because nowhere the Assessing Officer stated in the assessment order that assessee under consideration had made investment in India in any building, land or moveable and immovable property. Hence, the figure at 550/-, cannot be unexplained investment, unless it is supported by any other corroborative evidence. Arguments of Learned DR for the Revenue, on merit.: 14. On the other hand, Ld. CIT-DR for the Revenue, on merit stated that during the course of post search investigation, while analyzing the I-phone 12 Pro Max of Mansur Mehta, which was found during the course of search proceedings u/s 132 of the Income Tax Act 1961, a whatsup- chat, stating a figure of 550/- was noticed by the search team. The assessee, under consideration, has been identified through the WhatsApp chat /e-mail communications found in the digital devices of Mansur Mehta, who deals with him in cash transactions. In the email, Mansur Mehta has sent some images that contain hand written notes with some calculations of money as on 01.12.2012. The snapshots of the email and images found, were pasted by the assessing officer, in the assessment order page No.3, which is corroborated by the statement of Rajiv Saxena and Mansur Mehta. Normally, the investments are made in crores, therefore, assessing officer by applying his common sense, construed or interpreted the figure of 550/- as if, it is Rs.5,50,00,000/-. Besides, Mansur Mehta in his statement stated that he came in contact of Rajiv Saxena, when he was trying to form his company in Dubai. Further, he stated that he received investment in the year 2011-12 from local investors, based in Dubai, in his company, through Rajiv Saxena. From the above submissions made by the Rajiv Saxena, Reena Jeswani and Mansur Mehta, as a evidence, it was seen that Rajiv Page | 10 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana Saxena helped Mansur Mehta in setting companies in Dubai and facilitating investment in his Indian companies. The Rajiv Saxena also facilitated Mansur Mehta in management of funds abroad and facilitating fund in India. Therefore, learned, DR stated that above facts, clearly explained that the assessee has made cash transaction of Rs. 5,50,00,000/- with Mr. Mansur Mehta for investment purpose, hence, addition made by the assessing officer may be upheld. 15. The Ld. D.R. for the revenue, also submitted that Assessing Officer has rightly made the addition under Section 69 of the Act, as the assessee made investment in cash to the tune of Rs.5,50,00,000/-. Arguments of Learned Counsel for the assessee on technical issue: 16. On technical issue, Shri R.D. Lalchandani, Learned Counsel for the assessee, vehemently argued, on the ground Nos. 1 & 2, raised by the assessee, in respect of reopening of assessment, stating that reopening of the assessment was barred by limitation of time and the said reopening of the assessment, was also beyond the scope of the powers of the Assessing Officer. The Ld. Counsel, took us through the Paper Book Page No. 2, wherein notice under Section 148 of the Income Tax Act, 1961 is placed and the same was issued by the Department on 31.03.2023. The Ld. Counsel submitted that in the assessee’s case, the assessment year involved is the assessment year (A.Y.) 2013-14, therefore, six years elapsed on 31.03.2019. Therefore, after 31.03.2019, ( that is, after the expiry of the 6 years), the assessment cannot be reopened, as per the provisions of Section 149 of the Act. The Ld. Counsel, also submitted that there was an amendment in Section 148 of the Act, w.e.f. 01.04.2021, however, the said Page | 11 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana amendment does not apply to the assessee`s case under consideration, as the assessment year involved in the assessee’s case under consideration, is the assessment year 2013-14 and the amendment in Section 148 of the Act, came later on, as on 01.04.2021, therefore, amended provision are not applicable to the assessee under consideration. The Ld. Counsel took us through the provisions of Section 149 of the Act and stated that the assessment has been reopened after the expiry of six years period, therefore, as per old provisions of the Act, ( the amended provisions are not applicable to the assessee, as explained above) the re-assessment proceedings cannot be initiated against the assessee. Therefore, learned Counsel for the assessee, prayed the Bench that reassessment proceedings, initiated against the assessee may be quashed. Arguments of Learned DR for the Revenue on technical issue: 17. On technical issue, Ld. CIT-DR for the Revenue submitted that in the assessee’s case under consideration, the assessee is non-resident, therefore, the reopening was made based on the “foreign assets”. Therefore, clause (C ) of sub-Section (1) of Section 149 of the Act, ( old provision) is applicable to the assessee’s case under consideration and in that circumstances, the re-assessment proceedings can be initiated within 16 years, from the end of the relevant assessment year, where the income in relation to any asset, including the financial interest in an entity located outside India, which is chargeable to tax, has escaped assessment. Therefore, re-assessment proceedings, under section 147/148 of the Act, has rightly been initiated against the assessee. Page | 12 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana Analysis and Conclusion: 18. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that assessing officer initiated the reassessment proceedings against the assessee, with the approval of Principal Commissioner that the books of accounts or documents, seized or requisitioned under section 132 of the Act, in case of Shri Mansur Mehta Group, pertains or relates to the assessee under consideration. Therefore, we note that there was no search on the assessee. We find that the figure mentioned in the WhatsApp chat at 550/-, has been interpreted by the Assessing Officer by adding five zeros, as if, it is at Rs. 5,50,00,000/- without any basis. We find that what is the basis, to add five more zeros, has not been explained by the Assessing Officer in his assessment order. As per learned DR for the revenue, the assessing officer added five zero, after the figure at 550/-, by applying common sense, is not acceptable.The addition made by the Assessing Officer (AO) , is based purely on his own assumption, such as arbitrarily adding five zeroes to Rs. 550/-, found in a WhatsApp chat, is not legally sustainable, in the eyes of law, as, it is not corroborated by any further evidence. Such five zeroes were not even corroborated by a clear statement taken during the search proceedings. Neither the assessee stated nor the third-party stated, in his statement that five zeroes to Rs. 550/- may be added. 19. We note that the addition made by the assessing officer, must be based on concrete evidence and not on mere suspicion, conjecture, or assumptions. No addition can be made on the basis of assumptions and Page | 13 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana presumptions without corroborative evidence. A WhatsApp chat showing a reference to Rs. 550/- alone does not prove that the assessee, made investment in India of Rs. 550 x 100,000 ( that is, Rs.5,50,00,000).The evidentiary value of a WhatsApp message must be corroborated with supporting evidence such as bank statements, ledger entries, cash flow statement, or statements from the sender/receiver etc. Any arbitrary enhancement in the figure of WhatsApp chat, by the assessing officer (like adding 5 zeroes) without giving the assessee a chance to rebut would violate the principles of natural justice, also. If the assessing officer wants to treat the figure at 550/- equivalent to Rs.5,50,00,000/-, by his own assumption and presumption, then in that circumstances, the onus is on the assessing officer to prove that the amount of Rs.5,50,00,000/-, is the investment made by the assessee in any movable and immovable property, in India, which he has failed to prove with corroborative evidence.That is, the assessing officer must prove that the Rs. 550 refers to undisclosed investment of assessee, and if claiming it is Rs. 5,50,00,000/-, then assessing officer must produce valid evidence before the assessee, for his rebuttal, which the assessing officer has failed to do so. Thus, addition of 5 zeroes to Rs. 550 is based purely on assumption by the Assessing Officer, which is unjustified, and therefore, needs to be deleted. 20. We also note that ld. DRP mentioned in its order that figure of 550/-, is apparently at Rs.550 lakhs, which is again without any base. The learned DRP did not mention that how the figure of 550/- is apparently at Rs.550 lakhs. By following arbitrary method, the said figure, could be apparently be presumed at Rs.5500 lakhs or Rs.55,000/- lakhs also. Thus, the findings of the Ld DRP, is also based on surmise and conjuncture, so far adding five zeroes are concerned. Page | 14 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana 21. We also note that the provision of Section 132(4A) and Section 292C of the Act creates deeming fiction on the assessee subjected to search or survey, wherein it may be presumed that any such document found during the course of search / survey from the possession or control of person searched / surveyed belongs to such person and contents of such documents are true. However, in the assessee`s case under consideration, it is an undisputed fact that the impugned loose papers- WhatsApp chat, was not found from the possession of assessee, but the same was found from the possession of third party. Therefore, noting made in such loose papers do not present a preponderance of probabilities, so as to support the allegation of unexplained investment. It is well settled position of law that a non- speaking document referred to as a “Dump Document” without any corroborative material or evidence on record has to disregarded for the purposes of assessments to be framed under the Income Tax Act. This view gathers support from the landmark judgement of the Hon’ble Supreme Court in case of CBI v. V. C. Shukla 1998 taxmann.com 2155 (SC) popularly, known as Jain Hawala Case, wherein it was held that any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper, is not rational and hence legal, unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. In this case it was held that entries in Jain Notebooks held on facts admissible under Section 34 of Evidence Act, but file containing loose sheets of papers are not “book” and hence entries therein not admissible under Section 34 of Evidence Act. Further it was also held in this case that entries in books of account shall not alone be sufficient evidence to charge any person with liability. Entries even if relevant are only corroborative evidence. Independent evidence as to trustworthiness of those entries is necessary to fasten the liability. In view of these facts, it was held by the Hon’ble Supreme Court that entries made in the Jain Hawala diaries are Page | 15 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana under Section 34 of the Evidence Act, but truthfulness thereof not proved by any independent evidence. It was also held in this case that “books” ordinarily mean a collection of sheets of paper or other material, blank, written, printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as “book” for they can be easily detached and replaced. The Supreme Court further went on to state that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness fix a liability upon a person. 22.The above view further gathers reinforcement from another recent and landmark judgement of the Hon’ble Supreme Court in case of Common Cause v. UOI [2017] 77 taxmann.com 245 popularly known Sahara dairies and Aditya Birla diaries case. In view of the above rulings laid down by Hon’ble Apex Court, we find that the figure 550/- reflected in the WhatsApp chat, is without any head or tail and such figure does not consist complete breakup of transactions and hence, no adverse inference could have been drawn solely on the basis of such WhatsApp chat. We also place reliance on the decision of Hon’ble Supreme Court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597 (SC), wherein, it is held that the fictional receipt cannot be deemed to be a receipt in the absence of any cogent material to support the factum of actual receipt. 23. Our view is further fortified by the judgement of the Hon’ble High Court of Delhi in case of CIT v. D.K. Gupta [2008] 174 Taxman 476 (Delhi), wherein, Hon’ble High Court had upheld the order of the lower court (ITAT), wherein, it was held that Ad-Hoc / Dumb Documents without any corroborative evidence/finding that the alleged documents have materialized into transactions cannot be deemed to be the income of the Page | 16 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana assessee. We also find that Co-ordinate Bench of ITAT Mumbai, in case of Amarjit Singh Bakshi (HUF) v. ACIT [2003] 86 ITD 13 (Delhi) (TM) held that any noting in the loose sheet is no evidence by itself. An entry in the books of account maintained in the regular course of business is relevant for purposes of considering the nature and impact of a transaction, but notings on slips of paper or loose sheets of paper cannot fall in this category. Thus, we find that in assessee`s case under consideration, the basis for addition is only WhatsApp chat. The WhatsApp chats are unsigned documents. The Assessing Officer has not established nexus between the WhatsApp chat with actual investment in India by the assessee, if any. Such WhatsApp chat, seized during the course of search, is a dumb document having no evidentiary value, hence no addition can be made, in the hands of the assessee, in the absence of corroborative material.In the instant case, undoubtedly no statement from the parties whose names found in the WhatsApp chat, has been brought to the notice and as such entire addition in the hands of the assessee, on the basis of uncorroborated, WhatsApp chat, in the loose paper form, is not possible. 24. Besides, the assessee under consideration, is a non-resident, therefore no any income has accrued or arisen in India, by way of WhatsApp chat, which contains figure at 550/-.The assessee stated that he lived in the UAE, since 1995, and as per section 5(2) of the Income Tax Act, 1961, an income of a non-resident, is not taxable, if such income, is not received or accrued or arised in India. Since, assessee had no income that is received or accrued or arose in India, hence he is not liable for payment of any taxes in India. Besides, no any investment was made by the assessee, in India, which is mentioned in the WhatsApp chat at Rs.550/-. At the cost of repetition, the provisions of section 5(2) of the Act, is reproduced below: Page | 17 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana “ (2) Subject to the provisions of this Act, the total income of any previous year of a person, who is a non-resident, includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to him in India during such year.” The assessee submitted, a copy of his passport, before the assessing officer, to demonstrate that he was non-resident in India, therefore, we note that since, the assessee is a non-resident in India, therefore, he is not liable to tax in India, on the basis of WhatsApp chat, which contains the figure at 550/-, as the said amount has neither accrued in India nor arisen in India. In addition to this, figure in WhatsApp chat, is an arbitrary figure, without any corroborative evidence, therefore, it is not a real income of the assessee. Under the Income Tax Act, only real income is to be taxed, not the imaginary figure or arbitrary figure, which does not have any support with corroborative evidence. Therefore, in absence of any external evidence, addition cannot be resorted to only on the basis of WhatsApp chat. The department had not brought on record any evidence to prove conclusively that the WhatsApp chat contained details of secreted profits which were chargeable to tax in India. Hence, we are not inclined to accept the contention of the Assessing Officer/ DRP in any manner and hence the addition so made is deleted. Hence ground No.3 raised by the assessee, on merit, is allowed. 25. As we have allowed the ground No.3 raised by the assessee, on merit, therefore, ground No.1 and ground No. 2, on technical issue, of reopening of assessment, under section 147/148 of the Act, that is, all technical Page | 18 IT(IT)A No.73/RJT/2025/AY.2013-14 Sidique Ibrahim Allana issues, of the additions, in the impugned assessment proceedings/DRP proceedings, are rendered academic and infructuous. 26. In the combined result, appeal filed by the assessee is allowed. Order is pronounced in the open court on 23/06/2025. Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot (True Copy) Ǒदनांक/ Date: 23/06/2025 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "