Section 68 addition on share application money fails where subscriber identity and source are proved and unchallenged.

Share application money cannot be taxed under section 68 where the assessee furnishes the subscribers' names, addresses, affidavits and other identity and source-related particulars, and the Revenue produces no effective rebuttal. Once the identity of the subscribers and the source of the credits are shown, the burden shifts to the Revenue to establish that the applicants are bogus or that the money ly belonged to the assessee. As the affidavits were not tested by cross-examination or contradicted by material evidence, the Tribunal's deletion of the addition was upheld and no substantial question of law arose.

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Issues: Whether the addition made under section 68 of the Income-tax Act, 1961 on account of share application money was justified when the assessee had furnished the names, addresses, affidavits and other particulars of the subscribers, and whether any substantial question of law arose in the Revenue's appeal.

Analysis: The assessee had produced affidavits and complete particulars of the share applicants, including identity and source-related details. The Tribunal held that once the identity of the subscribers and the source of the credits were established, the burden shifted to the Revenue to show that the applicants were bogus or that the money belonged to the assessee. It further noted that the affidavits were not rebutted by cross-examination or any effective contrary material. On that basis, the Tribunal deleted the addition under section 68. The High Court accepted that view and found no error in the Tribunal's approach.

Conclusion: The addition under section 68 was not sustainable, and no substantial question of law arose for consideration.

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