During the search operation  in third party premises  drafts on Foreign Bank in name of  Company payable in India were found and seized. The AO added the Indian rupee equivalent of these sums in the hands of the assessee. The Tribunal found that there was no material on record to suggest that such a company did not exist nor evidence of any link between the company PAD and the assessee and held that therefore, the presumption as referred to under S. 292C would not arise. The Tribunal confirmed the addition in respect of the bank in the name of the assessee, and deleted the addition in connection with the bank draft in favour of the company PAD. On appeal the Department contended that, during the search operation, it found a document in the nature of a letter from the bank, which stated that, the last date for presentation of the draft in question had expired and that the assessee had to get the draft revalidated and that no such letter would have been written by the bank, unless the assessee was the beneficiary of the payments. Dismissing the appeal the Court held that a mere letter from the bank would not establish a relationship between the payable amount and the assessee, particularly when the draft was in favour of a limited company. As recorded, the documents were not seized from the possession of the assessee but during the raid from a third party. The search was not conducted at the premises of the assessee but at the residence of the third party from where the bank drafts were recovered. The draft in question did not contain the name of the assessee as payee but of a company PAD. On the facts the Tribunal had refused to accept the Department’s contention that the assessee was a beneficiary of such payment and based on the materials on record had reduced the additions made by the Assessing Officer on account of unexplained expenditure. ( AY.2000-01)