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2020 (6) TMI 210 - AT - Income TaxReopening of assessment u/s 147 - ingenuine loss - client code modification and assessee being beneficiary client has taken contrived losses and shifted out profits during the financial year 2008 – 09 to 2010 – 11 - HELD THAT:- The basis of the above reason was a report of survey and the details of the transaction carried out by the assessee. The report shows that it is not a genuine error because of the reason that it is not wrong punching of one or two keys but, code has been replaced. Therefore, it cannot be considered as a genuine loss. There is no assessment of income of the assessee u/s 143 (3) prior to issue of notice u/s 148 of the act. He perused the above information with the return of income filed by the assessee. He noted that assessee company has directors namely Mrs. Minakshi Gupta and Mr. Satinder pal Gupta. He found that there are no sales shown by the assessee. Only interest income is earned. Same is adjusted against expenses. Derivative loss is claimed in profit and loss account. On this basis he reopened the assessment. According to us, he has tangible information in the form of various reports of investigation, which is also backed by SEBI report, there was no assessment on the assessee on the return filed, and he found that there is a derivative loss booked by the assessee. Such loss is not genuine as per those reports. Thus we do not find any reason to interfere with the order of the ld AO and CIT (A) in upholding reopening of assessment - no infirmity in the reasons recorded by the learned assessing officer and in the reopening of the assessment under section 147. AO had tangible material, clear-cut information about the change of client code of assessee by TCG stock broking Ltd, exact nature of the changes are also available, it was also known to him that it is not miss punching or but complete change of all the keys. Ingenuine loss - when the assessing officer has categorically shown that there is a genuine allegation that the transaction entered into by the assessee of booking the loss is not genuine, the duty is cast upon the assessee to show that they are genuine. AO has categorically shown whole transactions with evidence to the assessee but assessee merely relied on the paperwork of client code modification. None of the evidences placed by the assessing officer were rebutted by the assessee. AO has not relied upon the statement of the broker of the assessee because he did not confirm anything. Therefore, there is no requirement of giving is cross-examination because the addition has not been made on the basis of his statement. The assessee also did not show by producing the director and the broker that client code modification has been done for some genuine reasons. We do not find any infirmity in the orders of the lower authorities in making the addition on account of client code modification as alleged bogus contrived loss of trained by the assessee. Accordingly we dismiss ground number three and four of the appeal.
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