Off-market share sale treated as genuine where documentary evidence and remand examination disproved sham transaction claim.

Off-market sale of shares was treated as genuine where the purchase was made by cheque, confirmed by the broker and issuing company, and reflected in the balance sheet; the sale was also supported by broker confirmations, sale bills, bank details and SEBI registration particulars. The mere fact that the transaction was off-market did not, by itself, establish a sham. The objection under Rule 46A also failed because the additional material was confronted during remand and examined by the Assessing Officer. The addition was therefore not sustainable.

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Issues: Whether the sale of shares effected off-market could be treated as a sham transaction and whether the addition made by the Assessing Officer was justified in view of the evidence produced before the appellate authority, including the objection based on Rule 46A.

Analysis: The purchase of 23,500 shares was made through cheque, was confirmed by the broker, and was also supported by the issuing company's confirmation showing transfer of the shares in the assessee's name. The shares were reflected in the balance sheet for the relevant year. The sale was supported by the selling broker's confirmation, sale bills, bank details, and SEBI registration particulars, and the remand proceedings showed that the Assessing Officer had examined the additional material. The fact that the sale was off-market did not, by itself, establish a sham transaction. The record also did not support the allegation of violation of Rule 46A, since the material was confronted in remand.

Conclusion: The off-market sale of shares was held to be genuine, the addition was not sustainable, and the Revenue's objection under Rule 46A failed.

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