Section 68 cannot be invoked without a fresh credit in the relevant year, even for earlier share application money.

Section 68 requires a sum to be found credited in the assessee's books in the relevant previous year; where share application money was received and verified in an earlier year, and only share allotment was recorded in the year under review, the provision does not apply in that later year. The transaction had already been supported by cheque details, bank statements, scrutiny assessment records, and the investor's confirmation under section 133(6). On that basis, the addition for the year under consideration was not sustainable and stood deleted.

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Issues: Whether an addition under section 68 could be sustained in the assessment year in which only share allotment was made, when the share application money had been received and examined in an earlier year.

Analysis: The amount in question had been received as share application money in an earlier assessment year, with cheque-wise details and bank statements furnished and examined in scrutiny proceedings under section 143(3) of the Income-tax Act, 1961. The investor also responded to notice under section 133(6) and confirmed the transaction. In the year under consideration, no fresh credit was received in the assessee's books; only the allotment of shares was reflected. Since section 68 applies to sums found credited in the relevant previous year, and the credit had already arisen in an earlier year, the basic condition for invoking the provision in the current year was not met.

Conclusion: The addition under section 68 could not be sustained for the year under consideration and was rightly deleted.

Final Conclusion: The Revenue's challenge to the deletion of the addition failed, and the assessment addition was set aside for the relevant year on the ground that no fresh credit arose in that year.

Ratio Decidendi: Section 68 cannot be applied in a year in which no sum is found credited in the assessee's books, even if the genuineness of an earlier-year share application transaction is questioned later.

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