Genuine investor claim upheld where documented share transactions and absence of revenue evidence defeated alleged bogus capital gains.

The assessee substantiated share purchases through purchase bills, banking-channel payments, transfer documents, demat entries, contract notes and bank statements, and the revenue did not discredit those materials or connect the assessee with price rigging, accommodation entries, or any adverse investigation. The record also showed that the invested company's amalgamation had been approved by the High Court, and the transactions were not proved to be sham or non-genuine. Having discharged the initial onus, the burden shifted to the revenue to show that the long-term capital gain claim was bogus, which it failed to do. The assessee was therefore treated as a genuine investor and the addition under section 68 was deleted.

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Issues: Whether the assessee was a bona fide investor in the shares of M/s Access Global Ltd. or had indulged in purchase and sale of shares only to claim fictitious long-term capital gain exemption under section 10(38) of the Income-tax Act, 1961.

Analysis: The assessee furnished purchase bills, payment through banking channel, share transfer documents, amalgamation records, demat entries, contract notes and bank statements to support the transactions. The material placed by the revenue did not discredit the documents or establish any link between the assessee and alleged price rigging, accommodation entries, or any investigation naming the assessee. The earlier amalgamation of the invested company was approved by the High Court, and the record did not show that the assessee's share transactions were shown to be sham or non-genuine. Once the assessee discharged the initial onus, the burden shifted to the revenue to prove that the claim was bogus, which was not done.

Conclusion: The assessee was held to be a genuine investor, the long-term capital gain claim was accepted as genuine, and the addition made under section 68 of the Income-tax Act, 1961 was deleted.

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