Section 68 additions fail where banking records, confirmations, and applicant identity and capacity establish genuineness of loans and share capital receipts.

Additions under section 68 were found unsustainable where the assessee produced ledger accounts, bank statements, income-tax returns, audited financials, confirmations and other supporting material for unsecured loans and share application money. The transactions moved through banking channels, the counterparties responded to section 133(6) notices, and the unsecured loans were repaid with interest where applicable before the section 148 notice. For share application money, the record supported the identity, capacity and genuineness of the applicants. The evidentiary burden was treated as discharged, and the section 68 additions were deleted.

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Issues: Whether the additions made under section 68 of the Income-tax Act, 1961, in respect of unsecured loans and share application money were sustainable.

Analysis: The assessee furnished ledger accounts, bank statements, income-tax returns, audited financial statements, confirmations and other supporting documents for the lenders and share applicants. The material showed that the transactions had moved through banking channels, the counterparties had responded to notices issued under section 133(6) of the Income-tax Act, 1961, and the amounts received by way of unsecured loans had been repaid, along with interest where applicable, before the notice under section 148. On the share application money issue, the documents placed on record supported the identity and capacity of the applicants and the genuineness of the receipts. In these circumstances, the evidentiary burden stood discharged and the additions were not sustainable.

Conclusion: The additions under section 68 of the Income-tax Act, 1961, were deleted and the assessee succeeded.

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