Unexplained money addition fails where on-money claim rests on untested third-party statements and undisclosed search material.

An addition for unexplained money based on alleged on-money payment for a flat was held unsustainable where it rested only on third-party statements and an Excel sheet said to have been found in search, but the underlying material was not furnished to the assessee. The builder's confirmation of receipt of the stated consideration was not addressed, and uncorroborated third-party statements without cross-examination could not by themselves support the adverse addition. The alleged electronic material was also not independently proved for evidentiary use. The addition was deleted in favour of the assessee.

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Issues: Whether the addition of Rs. 14,25,000 as unexplained money on account of alleged on-money payment for purchase of a flat was sustainable when it was founded only on statements of Cosmos Group personnel and alleged search material that was not furnished to the assessee.

Analysis: The addition was made solely on the basis of statements of third parties and an Excel sheet said to have been prepared during the search, but the incriminating material itself was not brought on record or supplied to the assessee. The builder's confirmation that the stated consideration of Rs. 72,00,000 had been received was not dealt with. A third-party statement, without corroboration and without opportunity of cross-examination, could not by itself sustain an adverse addition. The alleged electronic material was also not independently proved in the manner required for reliance on such evidence.

Conclusion: The addition was not sustainable and was deleted in favour of the assessee.

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