Abu Dawud Book 19, Hadith Number 3637.
Chapter : Transmission of traditions from the people of the book.
Narated By Abu Namlah al-Ansari : When he was sitting with the Apostle of Allah (PBUH) and a Jew was also with him, a funeral passed by him. He (the Jew) asked (Him): Muhammad, does this funeral speak? The Prophet (PBUH) said: Allah has more knowledge. The Jew said: It speaks.
The Apostle of Allah (PBUH) said: Whatever the people of the Book tell you, do not verify them, nor falsify them, but say: We believe in Allah and His Apostle. If it is false, do not confirm it, and if it is right, do not falsify it.