Loose Sheets Evidence Rule Bars Section 69C Addition Without Corroboration

Loose sheets recovered from a third party, unsupported by independent enquiry or corroborative evidence, were held insufficient to prove that they belonged to the assessee or that alleged cash payments were made by it. The Tribunal applied the settled principle that loose sheets alone have no evidentiary value to sustain an addition under section 69C. The addition was therefore unsustainable and was deleted.

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Issues: Whether the addition made under section 69C based on loose sheets and alleged cash payments, without corroborative evidence, was sustainable.

Analysis: The addition rested on loose sheets recovered from a third party and on alleged statements, but no independent enquiry or corroboration established that the documents belonged to the assessee or that the alleged cash payments were actually made by it. The Tribunal followed its earlier decision on the same underlying documents and the settled principle that loose sheets, standing alone and unsupported by other reliable material, have no evidentiary value sufficient to sustain an addition.

Conclusion: The addition under section 69C was unsustainable and was rightly deleted.

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