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2019 (8) TMI 101 - ITAT MUMBAISuppression of profit - hare / stock broker - allegation of obtaining fictitious loss by the assessee company by way of Client Code Modification (CCM) by the brokers in large number of commodity transaction - HELD THAT:- Nothing has been brought on record to establish that the assessee was in collusion with brokers or other parties so as to indulge in the practice of client-code modification with a view to shift the profits. On the facts, onus was on revenue to rebut the assessee’s stand by bringing cogent material on record which would prove the nexus of the assessee with the activity of client-code modification. The additions have been made merely on the basis of general observation of the investigation wing. It is trite law that no additions could be made merely on the basis of pure guess work, suspicion, conjectures or surmises. The applicable rules of the stock exchanges permit client-code modification so as to rectify the punching errors within certain time after closing of the trade. Nothing would suggest that the modifications were done in breach of the applicable rules or any punitive action was taken by the stock exchanges against the assessee’s broker for violation of the said facility. It is also evident that the percentage of modified trades in terms of value as well as volume was miniscule in comparison to total trades carried out by the assessee with the broker. The onus was on revenue to dislodge the assessee’s claim. Except for general observation of investigation wing, there was no minimum adverse material on record against the assessee which would prima-facie prove that loss was fictious and the assessee was in connivance with brokers which warrant the first appellate authority to investigate the matter further. All the transactions were duly reflected in the books, the transactions were through banking channels and the ledger confirmations were placed on record. - Decided against revenue.
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