Search assessment safeguards and corroborated evidence are essential; mechanical approval and unsupported third-party digital entries fail.

Search assessments under the income-tax law require valid recorded satisfaction for invoking jurisdiction against a person other than the searched person, and the challenge to jurisdiction under section 153C was rejected. The statutory approval safeguard was not treated as a mere formality: approval granted for multiple years without meaningful examination of the draft assessment order and seized material was held mechanical, rendering the assessments invalid. An addition for alleged unaccounted sale consideration based on third-party digital entries and search statements was deleted because the material lacked reliable corroboration and did not establish actual receipt of undisclosed consideration by the assessee.

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Issues: (i) Whether the assumption of jurisdiction under section 153C of the Income-tax Act, 1961 was valid; (ii) whether the approval granted under section 153D was mechanical and vitiated the assessments; (iii) whether the addition towards alleged unaccounted sale consideration on the basis of third-party digital material and statements could be sustained.

Issue (i): Whether the assumption of jurisdiction under section 153C of the Income-tax Act, 1961 was valid.

Analysis: The jurisdictional challenge turned on the recorded satisfaction, the date from which limitation and applicability were to be tested, and whether the proceedings could survive when the satisfaction note was not made available. The legal framework required proper satisfaction for initiating proceedings against a person other than the searched person, and the controversy also involved the effect of the statutory scheme governing the relevant years.

Conclusion: The challenge to jurisdiction under section 153C failed and the assumption of jurisdiction was upheld.

Issue (ii): Whether the approval granted under section 153D was mechanical and vitiated the assessments.

Analysis: The approval was granted for multiple assessment years in a single day. The statutory safeguard under section 153D requires application of mind to the draft assessment order and the seized material. On the facts, the approving authority had not meaningfully examined the record before granting approval, so the safeguard was treated as having been reduced to a routine formality.

Conclusion: The approval under section 153D was held to be invalid and the assessments for the relevant years were quashed on that ground.

Issue (iii): Whether the addition towards alleged unaccounted sale consideration on the basis of third-party digital material and statements could be sustained.

Analysis: The addition rested on excel-sheet entries found in the case of a third party, together with statements recorded during search. The material was not supported by direct proof of actual cash receipt by the assessee, the entries lacked sufficient corroboration, the alleged payments were said to extend beyond the dates of registered sale deeds, and the assessee was not shown to have been confronted with reliable, admissible evidence establishing receipt of the alleged on-money. The evidentiary value of the digital material was found inadequate when tested against the surrounding circumstances and the absence of corroboration.

Conclusion: The addition was not sustainable and was deleted.

Final Conclusion: The assessments for the search-related years could not survive in law because the approval under section 153D was mechanically granted, and the alleged on-money addition was unsupported by reliable corroborative evidence; the assessee obtained complete relief in the connected appeals.

Ratio Decidendi: In search assessments, jurisdictional and approval safeguards must be strictly complied with, and an addition based on third-party digital entries cannot be sustained unless the material is corroborated by reliable evidence showing actual receipt of undisclosed consideration.

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