Genuine share transactions: documentary evidence and uncorroborated statements were found insufficient to reject long-term capital gains exemption.

Documentary evidence of share purchase and sale, including banking payments, demat entries and exchange-routed trades, was treated as sufficient where the tax authority failed to disprove the records or make independent enquiry showing price rigging or accommodation entries. Reliance only on investigation reports and third-party statements, without corroboration linking the assessee, was stated to be insufficient to reject long-term capital gains exemption. The assessee's earlier withdrawal of the exemption claim was treated as made under misconception and not determinative by itself. The discussion follows precedent limiting additions based only on suspicion, human probabilities, or uncorroborated material; the share-sale additions and related commission addition were deleted.

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Issues: Whether the additions made towards alleged bogus sale proceeds of shares and the consequential estimated commission were sustainable, and whether the assessee's claim for exemption on long-term capital gains could be denied on the basis of search statements and investigation reports.

Analysis: The assessee had produced documentary evidence of purchase and sale of shares, including banking-channel payments, dematerialization entries and stock exchange routed transactions. The assessing authority did not disprove the documents or conduct independent enquiry to establish that the assessee was part of any price-rigging arrangement or that the assessee had actually received accommodation entries. The mere reliance on investigation reports and general statements of third parties, without corroboration and without implicating the assessee, was held insufficient to reject the claim. The assessee's earlier statement withdrawing the exemption was treated as having been made under misconception and could not, by itself, defeat the statutory claim. The jurisdictional precedent on genuineness of share transactions and the limits of additions based only on suspicion, human probabilities, or uncorroborated investigation material was followed.

Conclusion: The additions treating the share-sale consideration as unexplained income and the related commission addition were deleted, and the Revenue's appeals failed.

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