You cannot use ideas, data, or wording without indicating their source. If they are based on a document you are not allowed to cite, then you have a major problem. (Note that you can cite documents that are not available to the public. That's certainly problematic, because other people can't verify or use the source, but it's different from not citing anything.)
Theoretically, you could attribute ideas or quotes to an anonymous source if the source approves but asks not to be named. That would be exceedingly unconventional, and I don't think I've ever seen it done in an academic paper, but it would at least be intellectually honest and avoid giving the impression that the ideas were yours. The same is true in principle for data, although it's not clear why readers would trust data from an anonymous source.
What worries me about your question is that you say your advisor still has confidential documents from his previous work. Maybe I'm reading too much into your description, but it sounds like the reason your advisor will not let you cite them is that he is not allowed to share them with you (and he may not even be allowed to possess or use them himself). If that's the case, then the whole project sounds unethical. It might be justified in some rare circumstances, for example involving whistleblowers or similar leaks, but outside of these cases, you cannot use confidential documents without explicit permission.
In any case, there is certainly no principle that says you can use documents without citation if they are not available to the public. Either you have misunderstood your advisor or he is wrong on this point.