Section 68 cannot be used to tax recorded share sale proceeds again when the underlying investment and sale entries are accepted.

Sale proceeds of shares recorded in the assessee's books could not be added as unexplained cash credit where the earlier share investment had already been accepted by the Revenue and the Assessing Officer relied mainly on Investigation Wing information without disproving the purchase or sale entries. Section 68 was held inapplicable on these facts, and taxing the same receipts again would amount to double addition. The deletion of the addition was therefore sustained.

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Issues: Whether the addition of sale proceeds of shares as unexplained cash credit under section 68 of the Income-tax Act, 1961 was justified.

Analysis: The assessee had shown the purchase of the shares in the preceding assessment year in its books and balance sheet, and the same investment was accepted by the Revenue. The amount received in the year under appeal was recorded as sale proceeds of those shares and was already treated by the assessee as income. The Assessing Officer had proceeded mainly on information from the Investigation Wing without dislodging the assessee's books or finding that the share purchase or sale was bogus. In such circumstances, section 68 was held inapplicable, and treating the sale proceeds again as income would result in double addition.

Conclusion: The addition under section 68 was not sustainable and was rightly deleted; the Revenue's appeal failed.

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