Uncorroborated third-party papers cannot sustain unexplained investment addition without a clear nexus to the assessee.

Unsigned loose papers found with a third party, without the assessee's name, signature or direct transaction details, could not by themselves support an addition for alleged on-money payment under section 69B read with section 115BBE. The papers also contained dates inconsistent with the registered sale deed, weakening any nexus to the land purchase. The third party's statement, being untested by cross-examination and unsupported by independent corroboration, could not be relied on as the sole basis against the assessee. In the absence of reliable connecting evidence, the alleged unexplained investment was not proved and the addition was deleted.

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Issues: Whether addition under section 69B read with section 115BBE of the Income-tax Act, 1961, on account of alleged on-money payment for purchase of land could be sustained on the basis of unsigned loose papers found from a third party and the untested statement of that third party.

Analysis: The seized loose papers did not bear the assessee's name, signature, or any direct particulars of the land transaction, and their contents did not clearly connect the assessee to the alleged cash payments. The dates recorded in the papers were also inconsistent with the registered sale deed, creating doubt about the alleged linkage. The addition rested substantially on the statement of the third party who was not subjected to cross-examination, although that statement was the only material sought to be used against the assessee. In the absence of independent corroborative evidence, and where the material emanated from a third party without reliable nexus to the assessee, the presumption of truth could not be extended against the assessee. The burden to prove the alleged unexplained investment was not discharged.

Conclusion: The addition was not sustainable and was rightly deleted.

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