Burden of proof: documentary market evidence discharged assessee's burden; Revenue lacked cogent rebuttal, additions deleted.

Reopening of assessment and additions under unexplained cash credit and unexplained expenditure were examined against documentary market evidence; the Tribunal applied the principle that suspicion cannot substitute proof and that once the assessee produced contract notes, demat records, broker confirmations, bank statements and STT proof, the burden shifts and Revenue must produce cogent rebuttal material. The Tribunal found no specific adverse material impugning the documents or demonstrating rigging or accommodation entry and therefore deleted the additions and allowed the appeal in favour of the assessee.

---

---

Issues: Whether the additions made by the Assessing Officer under provisions relating to unexplained cash credit and unexplained expenditure (pertaining to share sale proceeds) and the reopening of assessment were sustainable in the absence of specific adverse material against the assessee.

Analysis: The Tribunal examined whether the reopening of assessment and the subsequent additions were supported by specific material implicating the assessee in price manipulation or accommodation entry arrangements. The authorities below relied on inclusion of the scrip in an investigation report as a penny stock and on generalised findings about modus operandi of entry operators. The assessee produced documentary evidence including contract notes, demat records, broker confirmations, bank statements and STT payment proof showing market purchases and sales and banking channel receipts. The Tribunal applied the legal principle that suspicion, however strong, cannot replace proof and that the burden on the assessee to establish genuineness, once supported by documents, requires the Revenue to produce cogent rebuttal material. The Tribunal found no specific defect or deficiency pointed out by the AO in the assessee's documentary evidence and no material directly demonstrating the assessee's involvement in rigging or accommodation entry.

Conclusion: The additions made by the AO under the provisions relating to unexplained cash credit and unexplained expenditure and the confirmation thereof by the Commissioner (Appeals) are not sustainable; the documentary evidence discharged the assessee's burden and the Revenue failed to rebut it. The appeal is allowed and the additions are deleted in favour of the assessee.

---