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2022 (1) TMI 673 - AT - Income TaxAddition on account of client code modification done by the broker to shift the profit - whether such client codes were modified at the instance of the assessee or there was some punching error at the end of the share broker? - HELD THAT:- Admittedly client codes were modified of the assessee as per the information received from the investigation wing - It is because the stock exchange permits the share broker to rectify the mistakes occurred while punching the data. If that be so, then there cannot be any fault which can be attributed to the assessee for the mistakes committed by the share broker. The client code modifications give rise to the doubt/ suspicion which requires detailed investigations from the parties concerned to reveal the truth. Merely, there were client codes modifications carried out by the broker cannot the basis to draw an inference against the assessee. In fact, in the case of client code modification the code of the other party is entered at the place of the assessee. Thus, the other party also required to be investigated whether the other party was involved in such transaction. Besides this other corroborative evidence has to be brought on record suggesting that there was the exchange of cash among the parties involved in such client code modification transaction. But we note that no such exercise has been carried out by the authorities below. As such there is no whisper in the order of the authorities below that there was the cash transfer between the parties for transferring the income of the assessee to the other party or shifting in the losses. Furthermore, in majority of the cases, the client code medication was carried out by the broker with the relative of the assessee and thus it is very unlikely that the assessee shall manipulate the income/loss with them for the reason that there would be consequential effect on their income too. Meaning thereby, as a whole, there would not any effect on the income of the assessee and her associates unless some contrary evidence are brought on record. Thus in the absence of such verification/examination carried out by the authorities below, we are not inclined to uphold their findings. We are not inclined to uphold the findings of the authorities below. Accordingly we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
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