Survey statements, third-party papers and denied cross-examination cannot by themselves sustain an addition without independent proof.

A statement recorded during survey under section 133A has no independent evidentiary value and can only be used corroboratively. A later statement recorded without granting cross-examination cannot be relied on against the assessee. Loose papers and diary entries recovered from a third party's premises, without independent and conclusive supporting evidence, do not by themselves prove the assessee's liability. As the Revenue did not first establish receipt of the alleged payments, the burden of proof was not discharged. The addition was therefore deleted, and only the entry supported by the assessee's signature was accepted.

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Issues: Whether the addition of Rs. 85 lakhs could be sustained on the basis of a statement recorded during survey, a later statement recorded under oath, and loose papers found from a third party's premises.

Analysis: A statement recorded during survey under section 133A does not have evidentiary value and can only serve a corroborative purpose. A statement recorded from the back of the assessee, without an opportunity of cross-examination, cannot be used against the assessee. Loose papers and diary entries found from a third party's possession, by themselves, do not establish liability of the assessee, especially when the entries were not shown to be supported by independent, conclusive evidence. The burden lay on the Revenue to first prove receipt of the alleged payments, and that burden was not discharged. The assessee had already accepted only the entry supported by his signature, and the remaining entries were not proved against him.

Conclusion: The addition of Rs. 85 lakhs was deleted and the issue was decided in favour of the assessee.

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