Section 153C needs a direct, corroborated nexus; third-party diaries and digital references alone could not support additions.

Section 153C jurisdiction requires seized material to show a clear, direct and corroborated nexus with the other person sought to be assessed; loose papers found with a third party, unlinked to the assessee by name or other reliable identifiers, were insufficient, so the notice and assessment failed. Additions based on diaries, notebooks and digital references to "DD" also could not stand because private third-party notings and tenuous contact-data references did not prove authorship, receipt of undisclosed cash, or any verified link to the assessee; suspicion and human probabilities could not replace independent corroboration. The assessment and related addition were therefore set aside.

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Issues: (i) whether the jurisdiction assumed under section 153C was validly founded on the seized material allegedly relating to the assessee; (ii) whether the addition based on diaries, notebooks and digital references to "DD" could be sustained in the absence of direct identification and independent corroboration.

Issue (i): whether the jurisdiction assumed under section 153C was validly founded on the seized material allegedly relating to the assessee.

Analysis: The seized documents were found from the possession of a third party and did not bear the assessee's name, PAN, address or any other direct identifier. The only link relied upon was the initials "DD", supported by mobile contacts, Truecaller data and electronic references, but these materials did not establish a clear and demonstrable nexus with the assessee. The satisfaction recorded for section 153C did not show a live, cogent connection between the seized material and the assessee, and the statutory presumption attached to documents found in search could not be transposed to a third party without independent evidence.

Conclusion: The assumption of jurisdiction under section 153C was invalid and the notice and consequential assessment could not be sustained.

Issue (ii): whether the addition based on diaries, notebooks and digital references to "DD" could be sustained in the absence of direct identification and independent corroboration.

Analysis: The entries in the loose diaries and notebooks were private notings of a third party and, by themselves, lacked evidentiary value against the assessee. The author of the diaries did not identify the assessee as "DD" and explained the code as a transaction identifier. The digital material, including contact lists and Truecaller information, was regarded as too tenuous to prove authorship or receipt of undisclosed cash. Human probabilities could assist appreciation of evidence, but could not replace proof, and additions could not rest on suspicion or conjecture without corroborative material linking the transactions to the assessee.

Conclusion: The addition for unexplained cash transactions was not sustainable.

Final Conclusion: The jurisdictional foundation having failed, the consequential assessment and the impugned addition were both set aside, and the Revenue's challenge failed.

Ratio Decidendi: For invoking section 153C and sustaining a related addition, the seized material must disclose a clear, direct and corroborated nexus with the other person sought to be assessed; loose third-party documents and unverified digital references, without independent evidence, are insufficient to establish that nexus.

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