Unexplained share sale additions fail where banking, demat and stock exchange records support genuineness without assessee-specific evidence.

Additions under section 68 for share sale proceeds were unsustainable because the transactions were supported by banking records, long holding, stock exchange sale, and demat evidence, while the Revenue produced only a general investigation report without any assessee-specific linkage or independent corroboration. The consequential addition under section 69C for commission also failed because it rested entirely on the disallowed section 68 addition; once the underlying allegation of accommodation entries was not proved, no unexplained expenditure could be inferred. Both additions were deleted.

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Issues: (i) whether the addition made under section 68 of the Income-tax Act, 1961 on account of sale proceeds of shares was sustainable in the facts of the case; (ii) whether the consequential addition under section 69C of the Income-tax Act, 1961 towards commission expenditure was sustainable.

Issue (i): whether the addition made under section 68 of the Income-tax Act, 1961 on account of sale proceeds of shares was sustainable in the facts of the case.

Analysis: The transaction was supported by purchase through banking channels, holding of shares for more than three years, sale through a recognised stock exchange, and demat records. The Revenue relied principally on a general investigation report regarding manipulation in the scrip, but brought no material to connect the assessee with any entry operator, tainted party, or rigging activity. The assessee's name did not figure in the adverse material, and no independent enquiry or contrary evidence was shown to discredit the documentary trail.

Conclusion: The addition under section 68 was not sustainable and was rightly deleted.

Issue (ii): whether the consequential addition under section 69C of the Income-tax Act, 1961 towards commission expenditure was sustainable.

Analysis: The commission addition was made only as a consequence of the alleged accommodation-entry addition under section 68. Once the underlying addition was found unsustainable, the basis for treating any commission as unexplained expenditure also disappeared.

Conclusion: The addition under section 69C was not sustainable and was rightly deleted.

Final Conclusion: The Revenue failed to establish that the share transactions were non-genuine or that the assessee had obtained accommodation entries, and both additions were deleted.

Ratio Decidendi: A general investigation report, any assessee-specific link or independent corroborative evidence, is insufficient to sustain additions for unexplained share sale proceeds or consequential commission where the transaction is supported by banking, demat, and stock exchange records.

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