Documented share transactions cannot be rejected on general manipulation allegations without evidence linking the taxpayer to wrongdoing.

Documented listed-share transactions supported by allotment records, demat statements, contract notes, bank records and securities transaction tax details cannot be treated as unexplained cash credits merely on general investigation material alleging scrip manipulation or abnormal price movements. Where no cogent evidence links the taxpayer to price rigging, accommodation entries, unaccounted cash payments, or false documentation, suspicion does not displace substantiated transactions. The notes state that the long-term capital gains exemption claim was allowable, and that additions for sale proceeds and estimated commission expenditure were deleted.

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Issues: Whether the sale proceeds of listed shares, claimed as exempt long-term capital gains, could be treated as unexplained cash credit and whether estimated commission expenditure could be added in the absence of evidence disproving the documented share transactions.

Analysis: The assessee supported the purchase, holding and sale of shares with share certificates, allotment records, demat statements, contract notes, bank records and securities transaction tax details. The sale was through a registered stock broker and recognised stock exchange. The additions were founded principally on investigation material concerning alleged manipulation in the scrip and its abnormal price movement, without any specific material linking the assessee to price rigging, accommodation entries or payment of unaccounted cash. The documentary evidence was not shown to be false or deficient, and no independent inquiry was made to displace it. General allegations, suspicion and market-related investigation reports cannot displace substantiated transactions without cogent evidence against the particular assessee.

Conclusion: The exemption claim under Section 10(38) was allowable; the addition of sale proceeds under Section 68 and the consequential estimated commission addition under Section 69C were deleted, in favour of the assessee.

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