Loose sheets alone cannot prove on-money payment; Revenue must establish actual understatement of property consideration with cogent evidence.

An addition for undisclosed profit on the sale and purchase of property could not be sustained where it rested only on seized loose sheets and allied material. The seized papers, at best, showed tentative or projected figures and did not establish actual on-money payment or receipt. No unaccounted cash was proved to have passed between purchaser and seller, and there was no supporting statement from the seller admitting extra consideration. With the addition already deleted in the purchaser's case and no corresponding addition in the seller's hands, the Revenue failed to discharge the burden of proving understatement of consideration.

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Issues: Whether the addition of undisclosed profit on sale and purchase of property could be sustained on the basis of seized loose sheets and allied material when the addition made in the hands of the purchaser had been deleted and no addition was made in the hands of the seller.

Analysis: The assessment proceeded on the basis of loose sheets seized during search and the Revenue treated the figures therein as representing cash received over and above the registered sale consideration. The decisive circumstance was that the seized material, at best, indicated tentative or projected figures and did not by itself establish actual on-money payment. No unaccounted cash was shown to have been paid by the purchaser or received by the seller, nor was there any supporting statement from the seller acknowledging receipt of extra consideration. The addition made in the purchaser's case had already been deleted, and there was no corresponding addition in the hands of the seller or its managing director. In these circumstances, the burden to prove understatement of consideration was not discharged by the Revenue.

Conclusion: The addition could not be sustained and the issue was answered in favour of the assessee.

Ratio Decidendi: A cash addition based solely on loose sheets or seized third-party material cannot stand unless the Revenue establishes actual understatement of consideration by cogent evidence, including proof of on-money payment or receipt.

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