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The Income Tax Officer, Ward-1 (2) , New Delhi Versus M/s. Abhishek Fincap Services Pvt. Ltd.

Disallowance of bogus loss - no incriminating material available on record - changing of the client code - Held that:- A.O. has not confronted any material or statement which may be incriminating in nature against the assessee so as to prove allegation of receiving accommodation entry of the loss. No material has been brought on record by the A.O. in support of his findings. There is no working given as to how the assessee has taken these loss entries. The Ld. CIT(A) on going through the stateme .....

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nt order as to how the impugned addition has been calculated by the A.O. and its basis. In the absence of any incriminating material available on record against the assessee, it is difficult to interfere with the findings of the Ld. CIT(A). No details have been brought on record as to from whom assessee has taken the bogus entry of losses. Learned Counsel for the Assessee also demonstrated through P & L A/c that in assessment year under appeal the loss as compared to the earlier year has reduced .....

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of ₹ 33,57,951 on account of disallowance of bogus loss claimed by the assessee. 2. Briefly the facts of the case are that, in this case, original return of income was filed on 18th September, 2010 declaring NIL income. Thereafter, information was received from Director of Income Tax (I & CI) on 27"' Feb. 2015, whereby it was informed that there were fictitious profits and losses created by some brokers by misusing the client code modification facility in F&O segment on NS .....

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tion of ₹ 33,57,951 on the ground that assessee has taken bogus loss by changing the client code. 2.1. The assessee challenged the reopening of the assessment as well as addition on merit before Ld. CIT(A). The written submissions of the assessee were reproduced in the appellate order. The Ld. CIT(A), however, confirmed the reopening of the assessment under section 147/148 of the Act and dismissed this ground of appeal of assessee. 2.2. Further, as regards addition on merit, the Ld. CIT(A) .....

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terial or evidence in support of his allegation in assessment order. The AO has also not spelt out in the assessment order as to on which scripts the appellant has taken loss entries. It is also alleged by the appellant that AO has never confronted the appellant on the issue of the loss claimed to be obtained by the appellant. It is alleged by the appellant that Assessing Officer has simply taken the report of the DIT (I & CI), Mumbai and pasted the same in the assessment order without bring .....

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to how the appellant has taken these loss entries. During the course of assessment proceedings, AO has not called for any information about alleged loss of ₹ 33,57,951/-. It is also stated that AO has relied upon the statements of Kunal Khaleja and Subhash Chandra Khaleja but on reading of those statements, it is seen that there is no correlation between the sum of ₹ 33,57,951/- and the statements of above mentioned brokers. At page 6 of the assessment order, the AO has stated that .....

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the appellant company has taken loss from these client code modifications. The name of scripts in which the client code has been changed by the brokers and details of the transactions has not been provided by the AO to the appellant. Therefore, the Assessing Officer has failed to bring any adverse information on record to prove the allegation that appellant has taken loss of ₹ 33,57,951/- by misusing the client code facility. In its submission the appellant has given details of purchase a .....

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The Ld. D.R. relied upon the order of the A.O. and submitted that in case A.O. failed to discharge his functions properly, the obligation to conduct proper enquiry shifts to the Commissioner (Appeals) and Tribunal and they cannot simply delete the addition made by the A.O. on the ground of lack of enquiry. In support of his contention, the Ld. D.R. relied upon the decision of Hon ble Delhi High Court in the case of CIT vs. Jansampark Advertising & Marketing (P.) Ltd., (2015) 375 ITR 373 (Del .....

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the preceding assessment year, the loss was ₹ 6.38 crores. It would mean that loss has reduced in assessment year under appeal. Therefore, there is no question of assessee taking any bogus entry on account of bogus loss. He has filed copy of the P & L A/c on record. 5. After considering the rival submissions, I do not find any merit in the appeal of the Revenue. The A.O. has not pointed out any basis or material or evidence to support his findings that assessee received any bogus entr .....

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