Section 292C presumption cannot sustain additions without a clear nexus between seized material and the assessee.

Additions under sections 69A and 69B based on survey material cannot be sustained merely by invoking the presumption under section 292C unless the impounded documents show a clear and logical nexus with the assessee and the alleged transaction. Where the figures relied on by the Assessing Officer are not found in the seized papers and the property details in the material do not match the assessee's case, the foundational facts for the additions are not established. On those facts, the presumption could not be applied, and deletion of the additions was justified.

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Issues: Whether the additions made under sections 69A and 69B of the Income-tax Act, 1961, based on survey material, could be sustained by invoking the presumption under section 292C of the Income-tax Act, 1961, in the absence of a clear nexus between the seized documents and the assessee.

Analysis: The additions were founded on documents impounded during survey proceedings, but the figures relied upon by the Assessing Officer were not reflected in the seized papers and the flat number mentioned in the material did not match the property attributed to the assessee. The presumption under section 292C of the Income-tax Act, 1961 can operate only where the seized material has a clear and logical connection with the assessee and the transaction in question. Since the basic facts relied upon for the additions were not borne out from the impounded material, the presumption could not be applied to sustain the additions. In these circumstances, the deletion of the additions was justified.

Conclusion: The additions under sections 69A and 69B were not sustainable and the assessee succeeded on this issue.

Ratio Decidendi: Presumption under section 292C of the Income-tax Act, 1961 cannot sustain an addition unless the seized or impounded material is shown to have a clear nexus with the assessee and the alleged transaction.

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