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2023 (2) TMI 1057 - AT - Income TaxReopening of assessment u/s 147 - reasons to believe - own satisfaction or borrowed satisfaction - client code modification has been done for shifting of profit and loss by the assessee - HELD THAT:- Honourable Bombay High Court in case of Pr. CIT vs. Shodiman Investments (P.) Ltd. [2018 (4) TMI 1287 - BOMBAY HIGH COURT] by deciding the identical issue held that “reopening notice has to be issued by the AO on his own satisfaction and not on borrowed satisfaction”. Here in this case it is proved on record that the AO was having no material whatsoever before him except the information sent by DIT(Inv.) by recording the fact that certain brokers, one such broker is M/s. BP Equities Pvt. Ltd., were carrying out non genuine profits and losses by misusing the client code modification in F&O segment. Merely on the basis of this information the AO hurriedly proceeded to reopen the assessment which is not sustainable in the eyes of law. Assessment cannot be re-opened on the basis of reasons recorded that client code modification has been done for shifting of profit and loss by the assessee particularly when there is no material on record that such client code modification was done with malafide purpose of shifting of profit to evade the tax nor any such material was there before the AO. Initiation of reopening proceedings u/s 147/148 are bad in law and the subsequent assessment order framed by the AO is not sustainable in the eyes of law, hence ordered to be quashed without entering into the merits of the case and consequently impugned order passed by the CIT(A) is set aside. Decided in favour of asseessee.
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