Genuine exchange-traded share gains cannot be taxed as unexplained cash credit on general penny-stock allegations alone.

Long-term capital gains from shares acquired years before sale, traded through the stock exchange, and supported by Securities Transaction Tax could not be treated as unexplained cash credit solely on general allegations that the scrip was a penny stock. The notes state that no specific finding linked the taxpayer or broker to price manipulation or established that the transactions were non-genuine. As the concurrent appellate findings deleting the Section 68 addition were neither perverse nor legally unsustainable, no substantial question of law arose.

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Issues: Whether the Revenue's challenge to deletion of the addition of long-term capital gains as unexplained cash credit under Section 68 of the Income-tax Act, 1961 raised any substantial question of law.

Analysis: The shares had been acquired approximately seven years before their sale, were sold through the stock exchange, and the transactions were supported by payment of Securities Transaction Tax. The addition was based only on general information regarding the alleged penny-stock nature of the scrip, without a specific finding linking the assessee or the broker to price manipulation or establishing that the transactions were non-genuine. The concurrent factual findings of the appellate authorities were therefore not shown to be perverse or legally unsustainable.

Conclusion: No substantial question of law arose from the Tribunal's order deleting the addition under Section 68 of the Income-tax Act, 1961.

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