Section 68 verification of share capital claims requires remand when fresh evidence is raised for the first time on appeal.

Section 68 treatment of share capital and share premium depends on verification of the source and supporting evidence. Where the assessee raised a fresh claim at the appellate stage, including a foreign remittance and non-resident plea, but did not place that material before the Assessing Officer, the record was insufficient for final determination. Because the appellate authority did not record reasons for admitting the new material or call for a remand report, the proper course was to restore the matter for verification and a fresh decision in accordance with law. The addition was not finally decided on merits.

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Issues: Whether the addition made under section 68 in respect of share capital and share premium received from Shri Tejas Mehta was sustainable on the existing record, and whether the matter required remand for examination of the assessee's fresh claim and supporting material.

Analysis: The assessee had not placed the foreign remittance and non-resident plea before the Assessing Officer, and those contentions were raised for the first time before the appellate authority. The appellate authority also did not record reasons for admitting the additional material or call for a remand report. In these circumstances, the record was found insufficient for a final adjudication of the assessee's claim regarding the source and the possible applicability of the proviso to section 68.

Conclusion: The matter was remitted to the Assessing Officer for verification and fresh decision in accordance with law, and the addition was not finally adjudicated on merits.

Ratio Decidendi: Where a new factual claim supported by additional material is raised for the first time at the appellate stage, and the appellate authority does not examine its admissibility or seek a remand report, the proper course is to restore the matter for verification and decision on the evidence.

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