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of The addition made u/s 68 for bogus share application money receipts was solely based on the statement of an unrelated third party, Shri Pravin Kumar Jain, recorded during a search conducted at his premises. This statement was later retracted. The assessee submitted necessary evidence regarding the receipt of share application money, including share application forms, board resolutions, PAN cards, bank statements, income tax returns, master data, and confirmations and affidavits from the investor companies' directors. This evidence proved the identity, creditworthiness, and genuineness of the transactions. However, the Assessing Officer and CIT(A) made the addition without considering the evidence and the provisions of law applicable for the relevant year. The addition u/s 68 can only be made if the assessee does not offer an explanation or if the explanation is unsatisfactory to the Assessing Officer, which was not the case here. The ITAT relied on the Supreme Court's decision in CIT v. Lovely Exports Pvt. Ltd. and the Chhattisgarh High Court's decision in Venkateshwar Ispat (P) Ltd., allowing the assessee's appeal.
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