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2019 (5) TMI 1794 - AT - Income TaxSuppression of income - shifting of profit - Client code modification - fictitious profits/loss - assessee indulged in transferring fictitious profits/loss to the other clients/beneficiaries by misusing the client code modification facility in the F&O segment - HELD THAT:- AO has disallowed the claim of loss on the basis of the information received from the ADIT (Inv.) Unit-3, Ahmedabad without conducting any independent enquiry or to bring anything on record to show that a particular transaction of client code modification is bogus. When the entire exercise is done by the broker and assessee is having no control over it, then in the absence of any material or fact to show the involvement of the assessee for shifting the alleged bogus loss/profit, the disallowance made by the AO is not sustainable in law. AO has just reproduced the report of the Investigation Wing wherein general observations were made based on the investigation that some of the brokers are indulged in transferring fictitious profit/loss from one client to another client in the garb of client code modification. AO has discussed the modus operandi of the broker for doing these activities. Nothing has been brought on record to show that the assessee has done anything wrong in respect of the claim of loss of ₹ 3,12,790/- whereas the assessee has declared a gross profit of more the ₹ 3.41 crores on account of share trading. Accordingly, following the earlier order of this Tribunal in the case of DCIT vs. Gyandeep Khemka [2018 (10) TMI 1626 - ITAT JAIPUR] the disallowance made by the AO is deleted. - Decided in favour of assessee.
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