Section 68 share capital additions fail where documentary evidence is unrebutted and no defect is found in the assessee's records.

An addition under section 68 for share capital receipts could not be sustained where the assessee produced confirmations and supporting documents, and the creditor companies had already been examined in their own proceedings without any adverse finding. The ITAT held that the revenue could not accept the same entities as genuine in one proceeding and treat them as accommodation entry providers in another, in the absence of any defect in the assessee's evidence. The addition was therefore deleted in favour of the assessee.

---

---

Issues: Whether the addition made under section 68 on account of share capital receipts from two companies was sustainable.

Analysis: The assessee had furnished confirmations and supporting documents for the transactions. The materials on record showed that the creditor companies were already examined in their own proceedings and no adverse finding had been recorded against them. In these circumstances, the revenue authorities could not treat the same entities as genuine in one proceeding and as accommodation entry providers in another without any defect being found in the assessee's evidence. The addition was therefore not justified.

Conclusion: The addition under section 68 was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Where the assessee produces documentary evidence supporting share capital receipts and no defect is found in such evidence, an addition under section 68 cannot be sustained merely on a general allegation of accommodation entries.

---