Genuine share transactions can defeat bogus long-term capital gain additions when documentary evidence supports purchase, holding, sale, and pricing.

Long-term capital gain from share sales cannot be treated as bogus where the assessee substantiates purchase, holding, transfer in its name, sale through registered brokers, and market quotations matching the sale price. An addition based mainly on a broker's statement is unsustainable when that statement is not put to cross-examination and no independent material discredits the documentary evidence or shows the transactions to be sham. On these facts, ITAT Delhi upheld the first appellate authority's finding that the share transactions were genuine and the declared capital gain was to be assessed as such, so the addition was deleted.

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Issues: Whether the addition made by the Assessing Officer on account of alleged bogus long-term capital gain from sale of shares was sustainable.

Analysis: The assessee had produced documentary material showing purchase and holding of shares, transfer in its name, registration records, sale through registered brokers, and market quotations matching the sale price. The addition had been made mainly on reliance upon a broker's statement, which was not put to the assessee for cross-examination, and no independent material was brought to discredit the assessee's evidence or to show that the transactions were sham. In these circumstances, the factual findings of the first appellate authority that the share transactions were genuine and that the capital gain was to be assessed as declared were not shown to be erroneous.

Conclusion: The addition was rightly deleted and the assessee's long-term capital gain could not be treated as bogus.

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