Genuine listed-share capital gains accepted where banking, exchange, tax and demat records lacked any proven entry-provider link.

Long-term capital gains from listed-share sales were treated as genuine where purchases and sales were supported by banking payments, recognised stock-exchange trades, securities transaction tax, contract notes and demat delivery. The Revenue failed to establish a live connection between the taxpayer, the scrip and alleged entry providers, and produced no adverse statutory action against the company or its promoters. Coordinate-bench decisions involving the same scrip and materially similar transactions also supported acceptance of the evidence. The notes state that the capital gains exemption was allowable and consequential unexplained-credit and alleged-commission additions were deleted; the reopening challenge was left open as academic.

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Issues: Whether the denial of exemption for long-term capital gains from sale of listed shares and the consequential additions as unexplained credit and alleged commission were sustainable.

Analysis: The purchase and sale transactions were supported by banking-channel payments, recognised stock-exchange trading, securities transaction tax, contract documentation and demat-account delivery. The material relied upon by the Revenue did not establish a live link between the assessee, the scrip, and the alleged entry providers. No adverse statutory order concerning the company or its promoters was produced. Consistent coordinate-bench decisions concerning the same scrip and materially similar transactions had accepted the documented transactions as genuine. The challenge to reopening was left open as academic after relief on merits.

Conclusion: The long-term capital gains claim was allowable; the additions under Sections 68 and 69C were deleted in favour of the assessee.

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