Protective addition based on third party seized material cannot be sustained without independent corroboration, so deletion follows.

Protective addition based on third-party seized electronic records and statements cannot be sustained where those materials do not independently identify the assessee's cash receipts and lack corroborative contemporaneous documents, and where a substantively identical addition against a co-purchaser has already been deleted on merits; the tribunal therefore held that a protective finding cannot be converted into a substantive addition absent independent corroboration, and deleted the protective on money addition in favour of the assessee.

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Issues: (i) Whether the protective addition of alleged cash payment (on-money) can be sustained where the substantive addition in respect of the same transaction against a co-purchaser has been deleted on merits and there is no independent corroborative evidence.

Analysis: The decision examines seized electronic records and statements recorded from persons associated with the developer, which purportedly show agreement values and higher actual sale prices with cash components. The seized material did not, however, directly identify individual buyers' cash payments, and no contemporaneous diaries or documents from buyers were produced to corroborate third-party statements. The substantive addition against the co-purchaser was deleted on merits by the First Appellate Authority after consideration of relevant facts. Given that the addition in the present case was made on a protective basis and the only material is third-party seized material and statements lacking independent corroboration, the protective addition cannot be allowed to survive as a substantive finding against the assessee.

Conclusion: The protective addition of Rs. 52,40,950 made on account of alleged on-money is deleted; the appeal is allowed in favour of the assessee.

Ratio Decidendi: A protective addition based solely on third-party seized material and statements, without independent corroborative evidence and where a substantively identical addition against a co-purchaser is deleted on merits, cannot be converted into a substantive addition and must be deleted.

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