Assessee had claimed long-term capital gain derived on sale of shares of LDPL and MARL as exempt under section 10(38). Assessing Officer held that both these companies were penny stock companies which were utilized to arrange accommodation entries to interested beneficiaries and price of share of LDPL and MARL were put on artificial rise and fall in a pre-arranged manner. Shares were purchased in cash in off-market transactions and were kept in pool account of broker though assessee was maintaining its own demat account. Considering these factors and circumstantial evidences, Assessing Officer concluded that intention of assessee was to obtain accommodation entries and treating amount claimed as LTCG as unexplained made addition under section 68. CIT(A) affirmed the order of the AO. On appeal the Tribunal held that neither assessee nor broker explained reason for carrying out transactions in off-market manner which was ordinarily not permissible and subject to certain legal constraints under Security Contract (Regulation) Act, 1956. Further, reason for payment for purchase of these shares in cash had also not been explained. It was also found that shares purchased in off-market were not dematerialised immediately after purchase but were dematerialized only a few days prior to sale which was strong evidence of orchestration of entire event of purchase of shares. SEBI had also suspended trading of shares of LDPL and MARL pursuant to manipulation in price movement in price of these securities as noticed by BSE. Surrounding circumstances of transactions established that transactions entered into by assessee were not genuine and, therefore, addition made by Assessing Officer is affirmed. (AY. 2015-16)