Long-term capital gains genuineness affirmed where documentary evidence and lack of contrary inquiry lead to deletion of tax additions.

Assessment of long-term capital gains on sale of listed shares turned on genuineness of transactions; the piece concludes that comprehensive documentary evidence - share certificates/contract notes, demat statements, broker sale records, bank receipts and levy of securities transaction tax - satisfied evidentiary requirements and were not rebutted by revenue. In absence of independent inquiry or cogent contrary material and having regard to a Coordinate Bench finding on identical facts, additions under provisions dealing with unexplained income and bogus share transactions were deleted and the taxpayer's LTCG claim sustained.

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Issues: Whether the long-term capital gains claimed under section 10(38) of the Income-tax Act, 1961 in respect of sale of listed shares (scrip SRK) are genuine or are to be treated as bogus/prearranged transactions such that additions under sections 68 and 69C are sustainable.

Analysis: The Tribunal examined the documentary record submitted by the assessee, including share certificates/contract notes, demat account statements, evidence of sale through a registered stockbroker, receipt of sale proceeds through banking channels and levy of securities transaction tax. The Tribunal noted that no direct, cogent or specific evidence was produced by the revenue to rebut these records or to show that the transactions were fabricated or that the assessee participated in price rigging. The Tribunal also considered that transactions in the identical scrip and the same assessment year were earlier examined by a Coordinate Bench which on facts held the transactions genuine and directed deletion of additions under sections 68 and 69C. Given identical facts and absence of independent inquiry or contrary evidence by revenue, the Tribunal followed the Coordinate Bench decision and accepted the documentary evidence as establishing genuineness of the LTCG claim.

Conclusion: The addition of the long-term capital gains and the alleged commission under sections 68 and 69C is deleted and the appeal is allowed in favour of the assessee.

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