On-money addition fails where third-party search material is uncorroborated and no independent enquiry proves actual cash payment.

An addition for alleged on-money payment under the Income-tax Act could not be sustained where the assessee's booking payment was made by cheque and later refunded on cancellation, and the Revenue relied only on third-party search material. The record did not establish actual cash payment by the assessee, and the lower authorities made no independent enquiry or reliable corroboration to prove that such on-money was paid or retained. On that material, the addition under section 69A was deleted as unsustainable.

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Issues: Whether the addition made on account of alleged on-money payment under section 69A of the Income-tax Act, 1961 was sustainable on the basis of third-party search material without independent enquiry or corroborative evidence.

Analysis: The assessee's booking payment of Rs. 11 lakhs was found to have been made by cheque and later refunded on cancellation of the transaction. The material relied upon by the Revenue showed the amount described as discount receivable and outstanding dues in the books of the developer, but did not establish actual payment of on-money by the assessee. The lower authorities did not undertake any independent verification to prove that the alleged cash payment was in fact made or retained, nor was there reliable corroboration to support the addition.

Conclusion: The addition under section 69A was unsustainable and was deleted; the issue was decided in favour of the assessee.

Final Conclusion: The impugned assessment addition could not be sustained on the available material, and the assessee's appeal succeeded.

Ratio Decidendi: A cash addition cannot be sustained merely on third-party search material or conjecture where the record does not establish actual payment and no independent enquiry or corroborative evidence supports the alleged on-money transaction.

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