During year, assessee  claimed long-term capital gain (LTCG) on sale of shares of company CCL and claimed exemption under section 10(38) on same. Pursuant to a survey operation, conducted upon premises of assessee, statement of assessee was recorded wherein he admitted that sale of shares of CCL was penny stock transactions but assessee was willing to pay tax on income thereon. On basis of same, Assessing Officer treated transaction of sale of shares of CCL by assessee and claim of exemption under section 10(38) as colourable transaction to evade tax and brought entire sale consideration to tax as income from other source.  Addition was deleted by the CIT(A). On appeal the Tribunal held that the  assessee had produced substantial evidence in form of allotment of shares, sale of shares through ISE, a SEBI authorized broker, proof of payment of STT as also fact that these shares were in demat form-Other than statement recorded that he was willing to pay tax, there was no shred of evidence available with Assessing Officer to presume that transaction done by assessee was colourable device or attempt at evading tax by using unscrupulous methods of tax evasion. The  assessee had complied with all requirement for claim of exemption under section 10(38). Denial of exemption was held to be not valid.  (AY. 2013-14)