Share capital from a non-resident investor was accepted as genuine where identity, creditworthiness, and transaction evidence were established.

Share capital and share premium received from a non-resident investor were held not to be unexplained credits under section 68 because the assessee produced incorporation documents, tax residency certificate, bank statement, foreign inward remittance certificate, RBI filings, valuation material and the investor's financial statements. Exchange-of-information material from Mauritius also supported the investor's identity, creditworthiness, corporate structure and investment activity. On this record, the genuineness of the transaction was established, and section 56(2)(viib) was held inapplicable to the remittance from a non-resident. The addition under section 68 was therefore deleted.

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Issues: Whether the addition made under section 68 of the Income-tax Act, 1961 in respect of share capital and share premium received from a non-resident investor was sustainable on the facts and evidence produced.

Analysis: The assessee produced incorporation details, tax residency certificate, bank statement, foreign inward remittance certificate, RBI filings, valuation material, and the investor's financial statements. Information obtained through exchange of information from Mauritius also showed the investor's corporate structure, funding base, and investment activity. On the evidence, the investor's identity, creditworthiness, and the genuineness of the transaction stood established. Section 56(2)(viib) of the Income-tax Act, 1961 was held inapplicable to the remittance from a non-resident. The material on record did not justify treating the receipt as unexplained credit.

Conclusion: The addition under section 68 was deleted and the assessee succeeded on this issue.

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