Unexplained investment claim fails where alleged on-money rests only on third-party statements without corroboration or cross-examination.

Addition for alleged cash payment on purchase of immovable property could not be sustained where it was based only on a third party's search material and employee statements. The assessee denied any on-money payment, no independent corroborative evidence was produced, and cross-examination of the persons relied upon was not allowed. On that record, the material was insufficient to prove unexplained investment, and the addition was deleted.

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Issues: Whether the addition made on account of alleged cash payment for purchase of immovable property could be sustained solely on the basis of third-party statement and uncorroborated material found in search proceedings.

Analysis: The addition rested on material gathered in the search of a third party and on statements of its employee, while the assessee denied having made any cash payment. The record did not disclose any independent corroborative evidence to support the alleged on-money payment, and the assessee was not afforded cross-examination of the persons whose statements were relied upon. In these circumstances, the material was held insufficient to sustain the addition as unexplained investment.

Conclusion: The addition was deleted and the assessee's challenge succeeded.

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