Third-party evidence and cross-examination requirements defeated cash on-money additions for alleged shop purchases.

Additions for alleged cash on-money on shop purchases could not be sustained where they were based only on a third party's Excel sheet and statement, without any independent corroboration linking the purchaser to the alleged payment. The material had no supporting receipt, diary, acknowledgement, or other contemporaneous evidence from the assessee, and its evidentiary value depended entirely on the maker's statement. Where adverse third-party material is relied on, fairness requires meaningful confrontation and an effective opportunity to rebut it, including cross-examination when the statement is material. In the absence of corroborative evidence, the additions were treated as resting on suspicion rather than proof and were deleted.

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Issues: Whether additions for alleged cash on-money paid for purchase of shops could be sustained solely on the basis of a third-party Excel sheet and statement, without independent corroboration and without affording the assessee an effective opportunity to cross-examine the maker of the statement.

Analysis: The additions were founded only on digital material recovered from a third party and the explanation given by that third party in his statement. No incriminating document, receipt, diary, acknowledgement, or contemporaneous material was found from the assessee to independently connect the assessee with the alleged cash payment. The evidentiary value of the Excel sheet depended entirely on the statement of its maker. Where adverse material collected from a third party is used against an assessee, fairness requires that the material be confronted and that a meaningful opportunity to rebut it be given, including cross-examination where the statement is material to the addition. Mere disclosure by the seller or developer could not, by itself, fasten liability on the purchaser in the absence of independent corroboration. In the absence of such corroborative evidence, the additions rested on suspicion rather than proof.

Conclusion: The additions were unsustainable and were deleted, with the result that the assessee succeeded.

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