On-money addition for property purchase fails without direct corroborative evidence linking the payer to undisclosed cash payment.

An addition for alleged on-money payment towards property purchase could not be sustained where it was based only on third-party material, a statement not furnished for effective rebuttal, and a general admission by the developer. In the absence of direct or independently verified corroborative evidence linking the assessee to any undisclosed cash payment, the material was insufficient to establish unexplained investment. The addition was therefore deleted.

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Issues: Whether the addition made towards alleged on-money payment for purchase of property as unexplained investment was sustainable on the basis of third-party material, statement, and general admission by the developer.

Analysis: The reassessment rested on information emanating from a search in the developer group and on a statement attributed to a third party, but no direct evidence of cash payment by the assessee was found during search. The assessment record did not refer to any specific corroborated entry establishing payment by the assessee, and the material relied upon was not independently verified. The statement used against the assessee was not furnished for effective rebuttal, and the general admission by the developer that on-money was received from some purchasers did not, by itself, prove payment by this assessee. In the absence of specific, corroborative evidence linking the assessee to the alleged undisclosed payment, the addition could not be sustained.

Conclusion: The addition of Rs. 19,62,500 made as alleged on-money payment was deleted and the issue was decided in favour of the assessee.

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