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2019 (2) TMI 720 - HC - Income TaxAddition being the profits of the Company on account of the large scale client code modifications - transfer the profits of the company to other clients for the purposes of adjustment of their incomes to evade payment of tax - motive of the client code modification was to indulge in circular trading to enable the generation of either profits or losses as required by clients at the end of the financial year - Held that:- Tribunal accepted the assessee's explanation and discarded the Revenue's theory that profit of the assessee's company were passed on to the clients. It was also noticed that the Revenue has not contended that the client code modification facility is often misused by the assessee to pass on losses to the investors, who may have sizable profit arising out of commodity trading against which such losses can be set off. The Revenue normally points out number of such instances of client code modifications as well as nature of errors in filling of the client code. At any rate, what can be taxed in the hands of the present assessee is the income escaping assessment. Even if the Revenue's theory of the assessee having enabled the clients to claim contrived losses, the Revenue had to bring on record some evidence of the income earned by the assessee in the process, be it in the nature of commission or otherwise. In the present case, the Assessing Officer has added the entire amount of doubtful transactions by way of assessee's additional income, which is wholly impermissible. - Decided against revenue.
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