On-money addition and undisclosed land investment require corroboration, with valuation reduced on adjacent plot comparison.

Addition for alleged on-money and undisclosed investment could not rest only on sellers' statements without cross-examination or independent corroboration, so the declared consideration for the plots purchased from the Jain brothers was accepted. For the plot bought from Rawat Constructions Pvt. Ltd., the Tribunal held that surrounding circumstances and admitted on-money receipt by the sellers justified rejection of the declared consideration to the extent supported by evidence, but the investment had to be estimated by reference to adjacent plots at a lower rate than that adopted by the Assessing Officer. The addition was therefore sustained only on a revised valuation basis.

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Issues: Whether the addition for alleged on-money and undisclosed investment in purchase of land was sustainable, and whether the addition had to be deleted or reduced in the facts of the case.

Analysis: The addition in respect of the plots purchased from the Jain brothers could not rest merely on their statements without affording cross-examination and without independent material against the assessee. The record also showed that no specific incriminating document was confronted to establish payment of on-money by the assessee for the purchase from Rawat Constructions Pvt. Ltd. At the same time, the surrounding circumstances and the admitted on-money receipt by the sellers justified rejection of the declared consideration for the land transactions to the extent supported by the evidence. For the Rawat plot, the investment was held to require estimation by reference to the adjacent plots, and the value was directed to be worked out at a lower rate than that adopted by the Assessing Officer.

Conclusion: The addition was not fully sustainable as made. The declared consideration for the plots bought from the Jain brothers was accepted, while the addition relating to the plot purchased from Rawat Constructions Pvt. Ltd. was sustained only to the extent of the revised valuation directed by the Tribunal.

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