Third-party statements and seized electronic data cannot sustain an on-money addition without corroboration or cross-examination.

Addition under section 69 based only on third-party search statements and excel data recovered from a third party was held unsustainable because the Revenue did not produce independent corroboration, confront the adverse material to the assessee, or allow cross-examination of the persons relied upon. No seized document specifically linked the assessee to any alleged on-money payment, and the assessee consistently denied making cash payment over the registered consideration. In the absence of an evidentiary nexus, third-party statements and electronic material alone did not satisfy the burden under section 69, and the addition was deleted in favour of the assessee.

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Issues: Whether the addition made under section 69 on account of alleged on-money payment could be sustained solely on the basis of third-party statements and electronic data recovered from a third party, without corroborative material, confrontation of adverse material, or opportunity of cross-examination.

Analysis: The addition was founded only on statements recorded during search in the case of the builder group and on excel data recovered from a pen drive seized from a third party. No independent material was brought to show that the assessee had actually paid any cash over and above the registered consideration, and no seized document specifically linking the assessee to the alleged on-money payment was confronted. The assessee consistently denied payment of cash, while the Revenue failed to establish the evidentiary nexus or to afford cross-examination of the persons whose statements were relied upon. In the absence of corroboration, third-party statements and electronic material could not by themselves discharge the Revenue's burden under section 69.

Conclusion: The addition was unsustainable and was directed to be deleted; the issue was decided in favour of the assessee.

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