Section 68 addition deleted where confirmations, bank records and linked assessment material supported the source of funds and transaction trail.

Section 68 addition on funds received from another company was not sustained where the assessee produced confirmations, bank records, an explanation for the timing difference in part of the amount, and material showing the source of funds in the intermediary company's hands. The assessment record of that intermediary also showed that the Department had accepted the share application money received from the foreign promoter. On that corroborative material, the basis for treating the receipt as unexplained was not made out, and the addition was deleted in favour of the assessee.

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Issues: Whether the addition made under section 68 on account of funds received from another company was sustainable when the assessee supported the transaction with confirmations, bank records and connected assessment material.

Analysis: The assessee produced documentary evidence showing the receipt of funds, the corresponding bank entries, the explanation for the timing difference in part of the amount, and material demonstrating the source of funds in the hands of the intermediary company. The record also contained the assessment order of that intermediary, in which the Department accepted the share application money received from the foreign promoter. In these circumstances, the transaction was supported by corroborative material and the basis for the addition was not made out.

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

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