Third-party seized material cannot sustain a section 69C addition without independent linkage to the assessee.

Third-party seized documents and statements cannot, by themselves, justify an addition under section 69C unless there is independent evidence linking the material to the assessee. The presumption under section 132(4A) remains confined to the person from whose possession the material was found and cannot be extended to a different assessee without proper corroboration. On that basis, the addition was deleted and the assessee succeeded.

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Issues: Whether the addition of Rs. 2 crore under section 69C could be sustained on the basis of third-party seized material and statements without independent evidence linking the material to the assessee.

Analysis: The addition rested on documents and statements recovered from third parties during search proceedings. The record did not show any independent corroborative evidence connecting the seized material to the assessee. The assessee was also denied effective reliance on such third-party material in the absence of proper linkage, and the presumption under section 132(4A) could not be extended beyond the person from whose possession the material was found.

Conclusion: The addition under section 69C was rightly deleted and the assessee succeeded.

Ratio Decidendi: An addition based on third-party seized material or statements cannot be sustained in the absence of independent evidence linking such material to the assessee, and the statutory presumption under section 132(4A) is confined to the person from whose possession the material is found.

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