Pursuant to an order under section 263 directing a fresh enquiry into share capital and share premium, the Assessing Officer, in the second round of reassessment, made an addition under section 68 without conducting a proper enquiry and without confronting the assessee with the material collected. The Tribunal held that although the validity of the revision order under section 263 had attained finality, the addition under section 68 could not be sustained. In the original reassessment proceedings, the assessee had already established the identity, creditworthiness and genuineness of all share applicants by producing confirmations, audited financial statements, income-tax returns and bank statements, which had been duly verified by the Assessing Officer. In the second reassessment, no fresh incriminating material was brought on record, relevant enquiries directed under section 263 were not properly carried out, and the material gathered was not furnished to the assessee, resulting in violation of section 142(3) and the principles of natural justice. Accordingly, the addition under section 68 was deleted. (AY. 2008-09)