Third-party search statements need corroboration before sustaining property purchase additions; unverified electronic material also failed admissibility.

Addition for alleged cash payment towards property purchase was deleted because it rested mainly on a builder promoter's search statement and uncorroborated material from the builder's premises. The Tribunal held that a third-party statement, without independent evidence from the assessee's side, could not sustain the addition. It also noted that the electronic material relied on was not shown to meet the admissibility requirements for electronic evidence under Section 65B of the Evidence Act. In the absence of corroboration, the search statement and material could not be used against the assessee.

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Issues: Whether the addition made on account of alleged cash payment towards purchase consideration was sustainable when it rested mainly on a third-party statement and uncorroborated search material.

Analysis: The addition was based on a statement recorded during search from a promoter of the builder group and on material said to have been recovered from the builder's premises. The Tribunal followed the coordinate Bench view in a connected case and held that, without independent corroboration from the assessee's side, a third-party statement by itself could not sustain the addition. It further noted that the electronic material relied upon was not shown to satisfy the requirements for admissibility of electronic evidence under Section 65B of the Evidence Act. The Tribunal also held that the search statement and material could not be used against the assessee in the absence of corroboration.

Conclusion: The addition was held unsustainable and was deleted; the appeal succeeded.

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