Pre-amendment section 153C requires seized material to belong to the assessee; third-party sheets need direct corroboration for on-money additions.

For pre-amendment section 153C proceedings, jurisdiction arises only where seized material from a third-party search is shown to belong to the assessee; mere references, without identifying particulars or control by the assessee, are insufficient because "belongs to" is narrower than "relates to" or "pertains to." In addition, an on-money addition for agricultural land purchase cannot be sustained solely on third-party excel sheets and statements unless there is direct corroborative evidence linking the assessee to the alleged cash payment. The commentary emphasises that absence of such linkage and corroboration defeats both jurisdictional assumption and the quantum addition.

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Issues: (i) Whether, on the facts of a search conducted prior to the amendment to section 153C, documents found from a third party satisfied the jurisdictional condition that they "belonged to" the assessee so as to justify initiation of proceedings under section 153C. (ii) Whether additions towards alleged on-money payment for purchase of agricultural land could be sustained on the basis of seized third-party excel sheets and related statements in the absence of direct corroborative evidence.

Issue (i): Whether, on the facts of a search conducted prior to the amendment to section 153C, documents found from a third party satisfied the jurisdictional condition that they "belonged to" the assessee so as to justify initiation of proceedings under section 153C.

Analysis: For the period prior to the amendment, section 153C required the Assessing Officer to be satisfied that the seized books, documents or assets "belongs or belong" to a person other than the searched person. The seized excel sheets were found from the hard disk of the searched company, contained no name, address, PAN, banking details or other identifying particulars of the assessee, and there was no evidence that the assessee had control over them. Mere reference to survey numbers standing in the assessee's name was held insufficient, since "belongs to" is materially different from "relates to" or "refers to". The amended expression "pertains to" could not be applied to searches completed before the amendment became operative.

Conclusion: The initiation of proceedings under section 153C was invalid and the assessee succeeded on the jurisdictional challenge.

Issue (ii): Whether additions towards alleged on-money payment for purchase of agricultural land could be sustained on the basis of seized third-party excel sheets and related statements in the absence of direct corroborative evidence.

Analysis: In the appeal relating to the assessment year 2015-16, the addition was founded on a third-party seized excel sheet and statements of sellers. The tribunal found that one of the relevant survey numbers was not reflected in the seized material, and for the other, the material did not by itself establish payment of on-money by the assessee. The assessee's denial, the lack of direct documentary evidence linking the assessee to the alleged cash payment, and the absence of sufficient corroboration outweighed the revenue's reliance on third-party material.

Conclusion: The deletion of the on-money addition was upheld and the revenue's challenge failed on merits.

Final Conclusion: The assessee's cross-objections succeeded on the jurisdictional ground, the revenue's appeals arising from the invalid section 153C proceedings became infructuous, and the only substantive quantum dispute considered on merits was also decided against the revenue.

Ratio Decidendi: For a pre-amendment section 153C proceeding, jurisdiction can arise only when the seized material from a third-party search is shown to belong to the assessee, and a third-party document or statement, without direct linkage or corroborative evidence, is insufficient to sustain an on-money addition.

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