Documentary evidence in share transactions can defeat section 68 additions when no specific corroboration links the assessee to accommodation entries.

Share transactions supported by contract notes, broker confirmations, bank statements and demat records, and routed through exchange and banking channels, were treated as genuine for section 68 purposes. The note states that where the revenue relied only on general investigation material and produced no specific corroborative evidence linking the assessee to price rigging or an accommodation arrangement, the onus was regarded as discharged. On that factual basis, the additions relating to sale proceeds of shares and related commission expenditure were considered unsustainable and were deleted, with the long-term capital gains exemption claim under section 10(38) accepted on the stated facts.

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Issues: Whether the additions made under section 68 in respect of the sale proceeds of shares and the related commission expenditure were sustainable, and whether the assessee had discharged the onus to justify the claim of exemption on long-term capital gains under section 10(38).

Analysis: The shares were purchased and sold through the stock exchange platform and the payments were routed through banking channels. The assessee produced contract notes, broker confirmation, bank statements, demat statement, balance sheets and other supporting material. No allegation was made against the assessee or the broker, no SEBI or other penal action was shown, and no specific role of the assessee in any price rigging was established. The additions were based on general investigation material without corroborative evidence linking the assessee to any bogus arrangement. On these facts, the onus under section 68 was treated as discharged.

Conclusion: The additions were held unsustainable and were deleted; the assessee succeeded on the issue.

Final Conclusion: The appeal was allowed and the assessed additions were set aside.

Ratio Decidendi: Where a share transaction is supported by contemporaneous documentary evidence, executed through exchange and banking channels, and the revenue fails to adduce specific corroborative material linking the assessee to a bogus accommodation arrangement, an addition under section 68 cannot be sustained.

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