Third-party seized data needs corroboration before additions can be made in the assessee's hands under section 153C.

Additions founded only on entries in the seized Hazir Johri software could not be sustained in the assessee's hands where the data was recovered from a third party and no independent corroboration linked the entries to the assessee. The presumption from seized material applied against the searched person, not automatically against another person under section 153C. In the absence of supporting evidence such as bills, vouchers, invoices, stock records or other proof of a reliable nexus, the alleged cash transactions, peak balance and estimated profit could not be assessed against the assessee. The appeal was allowed.

---

---

Issues: Whether additions based on entries in the seized Hazir Johri software, found from a third party during search, could be sustained in the assessee's hands in the absence of corroborative evidence and whether the consequent assessment under section 153C could be upheld.

Analysis: The seized digital data was recovered from the premises of the searched group and not from the assessee. The material reflected transactions in the name of various persons, but the assessee's connection with the entries was not established by independent corroboration. The Court noted that the presumption arising from seized material operated against the searched person and not automatically against the assessee, and that no supporting evidence such as bills, vouchers, invoices, stock records, or other material was brought on record to prove that the alleged cash transactions ly belonged to the assessee. In the absence of a reliable nexus, the additions made on the basis of the software entries, including the peak balance and estimated profit, could not be sustained.

Conclusion: The additions based solely on the Hazir Johri software entries were not sustainable in the assessee's hands, and the appeal was allowed.

---