Taxman uses chats, Excel sheets to dispute property sale value; ITAT quashes addition
The Income Tax Appellate Tribunal (ITAT) in Delhi ruled in favor of a couple who were accused of underreporting property sale proceeds. The tax department had relied on informal evidence like WhatsApp chats and Excel sheets to claim the property was sold for a higher value than declared.
Why it matters
This case highlights the limitations of using informal digital communication as primary evidence for tax assessments without corroborating financial documentation.
Property related transactions can sometimes be complicated. Recording the same in your income tax return is equally important. But what if the Income Tax Department sends you a notice for unexplained cash receipts, believing that you have received a part of the payment for property sale in cash.In one such case, the tax department relied on WhatsApp messages and Excel spreadsheets to reach the conclusion that the property had been sold for an amount higher than the one disclosed.
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