Third-party statement cannot sustain jewellery addition without corroboration or assessee-linked search material.

Additions for alleged cash payment on jewellery were unsustainable where they rested only on a third-party employee statement and search material from that third party, with no incriminating material found in the assessee's own search and the purchase bills supported the recorded invoices. The Tribunal held that a third-party statement, without independent corroboration or material linking the alleged payment to the assessee, could not justify the addition. The additions were deleted in favour of the assessee, and the legal grounds were treated as academic after the merits were decided.

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Issues: Whether the additions towards alleged cash payment for jewellery, made solely on the basis of a third-party statement and search material from another person, were sustainable in the absence of corroborative material found in the assessee's search.

Analysis: The additions were founded on the statement of an employee of a third party and on materials recovered from the search of that third party, while no incriminating material was found in the assessee's own search to establish any cash payment over and above the invoice value. The assessee consistently denied any such extra cash payment and produced the purchase bills. The Tribunal held that, without corroboration and without material traced to the assessee, reliance only on a third-party statement could not justify the additions. The legal grounds were left open as academic after the merits were decided.

Conclusion: The additions were deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: An addition cannot be sustained merely on a third-party statement or third-party search material unless it is corroborated by material found against the assessee or otherwise independently linked to the assessee.

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