Section 68 addition fails where running-account entries are compared with fresh loan figures and documentary evidence is unrebutted.

An addition under section 68 could not be sustained on a comparison between fresh loan figures in the tax audit report and running loan confirmation accounts that also reflected repayments and reversal entries. The assessee had produced confirmations, PAN, income-tax returns, audited financial statements and bank statements, and the Revenue brought no rebuttal evidence to show that the credits represented unexplained money. A purely ad hoc 20% addition based on a supposed discrepancy lacked statutory basis, and selective acceptance of part of the credits was unsustainable. The assessee's burden under section 68 was therefore treated as discharged, and the addition was deleted.

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Issues: Whether the addition made under section 68 on the basis of the difference between the tax audit report figures and loan confirmation accounts, and the alleged failure to prove creditworthiness and genuineness of five lenders, was sustainable.

Analysis: The tax audit report reflected fresh loans received during the year, whereas the confirmation accounts were running accounts that also included repayments and reversal entries. The impugned comparison between cumulative credits and loan figures was therefore misconceived. The assessee produced confirmations, PAN, income-tax returns, audited financial statements and bank statements, and the Revenue did not bring rebuttal evidence to show that the credits were the assessee's own unaccounted money. The provision under section 68 required explanation of the credit, and an ad hoc addition of 20% of a supposed discrepancy had no statutory basis. The surrounding circumstances and banking trail did not displace the direct documentary evidence, and the selective acceptance of part of the credits while rejecting the balance was unsustainable.

Conclusion: The addition under section 68 was not justified and was deleted; the issue was decided in favour of the assessee.

Final Conclusion: The assessee's burden under section 68 was held to be discharged, and the sustained addition was set aside.

Ratio Decidendi: An addition under section 68 cannot rest on a comparison of non-comparable running-account entries with fresh loan figures, and once the assessee produces credible documentary evidence of identity, creditworthiness and genuineness, a purely ad hoc or suspicion-based addition is impermissible.

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