Addition based on third-party dump ledger and on-money treatment contested; estimated profit element adjusted and reduced to Rs.24,000.

Addition assessed on account of alleged third-party dump ledger and statement recorded during search is disputed due to inadmissible and editable electronic source and absence of signature; consequence: such ledger alone is insufficient proof. Procedural lapse in not furnishing third-party statement and denying cross-examination infringes right to fair hearing and vitiates reliance on that evidence; consequence: evidentiary weight reduced. Parties consented to an estimated adjustment limited to taxable profit element of 'on-money'; consequence: revenue directed to disallow 30% of Rs.80,000 (Rs.24,000) as income.

---

---

Issues: (i) Whether the addition of Rs. 80,000 made under section 69A of the Income-tax Act, 1961 (as unexplained on-money) was sustainable and, if so, what quantum of addition should be made.

Analysis: The assessment was founded on a single digital ledger and a third-party statement recorded under section 132; the assessee filed responses to statutory notices but was not given the statement copy nor permitted cross-examination, indicating a procedural lapse affecting fair hearing. The ledger evidence is partially corroborated by the third-party statement, and both parties accepted making an estimated/adhoc addition rather than full confirmation of the entire on-money as income. Considering the limited corroboration, the nature of the evidence, the small amount involved, and the parties' willingness to agree on an adhoc compromise, an estimated addition reflecting only the profit element of the on-money is appropriate.

Conclusion: The addition under section 69A is partly sustained but reduced by directing an estimated addition of 30% of Rs. 80,000 (i.e., Rs. 24,000) taxable at normal rates. The procedural infirmity noted shall not prevent an adhoc quantum adjustment and the adjudication is confined to the special facts of the case.

Final Conclusion: The appeal is partly allowed by reducing the addition to Rs. 24,000 (30% of Rs. 80,000) and remitting the assessment to apply normal rates on that quantum; this decision is confined to the case's special facts and is not to be treated as a precedent.

Ratio Decidendi: Where an assessment relies on a single digital ledger and third-party statement with limited corroboration and procedural irregularity, an estimated addition confined to the profit element of the alleged on-money may be directed by way of adhoc assessment rather than full confirmation of the ledger amount.

---