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TMI Blog2017 (9) TMI 1837X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue read as under: - 1. On the facts and in the circumstances of fact and in law, the Ld. CIT(A) erred in computing the capital gains arising on transfer of a capital asset acquired by the assessee under gift, whether the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset or the year in which the assessee became the owner of the asset? 2. On the facts and in the circumstances of fact and in law, the Ld. CIT(A) erred in deleting the addition made on account of profit transferred due to client code changes in spite of the fact that the assessee has done this transfer during the market hours and the volume of these transfers is also huge. 3. On the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. On the other hand, the Ld. counsel of the assessee supports the order passed by the Ld. CIT(A) and relies on the decision in the case of Manjula J. Shah (supra), Arun Shungloo Trust vs. CIT (2012) 249 CTR (Del) 294 and CIT vs. Smt. Daisy Devaiah (2014) 50 taxmann.com 234 (Karn.). 6. We have heard the rival submissions and perused the relevant materials on record. It has been held by Bombay High Court in Manjula J. Shah (supra) that the expression "held by the assessee" used in Explanation (iii) to section 48 has to be understood in the context and harmoniously with other Sections and as the cost of acquisition stipulated in section 49 means the cost for which the previous owner had acquired the property, the term "held by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the gains arising out of the transactions in the scrips to various apparently unrelated beneficiaries to reduce his taxable income significantly. 8. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) has followed the order of the Tribunal in the case of M/s Sambhavnath Investment vs. ACIT [ITA No. 3109/Mum/2011], ITO vs. E Net Infoways P. Ltd. [ITA No. 2180/Del/2012] and allowed the appeal of the assessee. 9. Before us, the Ld. DR supports the order passed by the AO. He submits that the assessee has systematically transferred the gains of Rs. 1,19,28,273/- to other persons on all such trades where the client codes were modified in order to show the beneficiary as so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of E Net Infoways P. Ltd. (supra), the Tribunal has held: "Wrong punching of client code, requiring subsequent change in client code is rectified by the NSE, which has formulated rules and strictly implements them. It is not correct to assume that these changes were fraudulently done. Mistake has occurred due to wrong punching of client code by the staff of the broker and the same was later on rectified with the NSE. It may be mentioned that even the NSE was aware of the fact that client code was initially punched wrong and thereafter it has been corrected by the broker. There is no illegality noticed in this change of client code. This is a mere human error and it can happen in every sphere of life. Therefore, this error is not so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity Exchange, client code modification upto 1% is quite normal and is permitted without any penalty. From the circular of the Commodity Exchange, it is evident that client code modification is permitted on the same day. When the client code was modified on the same day, there cannot be any mala fide intention. When the transaction has been duly accounted for and the profit/loss has accrued to the concerned parties in whose names transactions have been closed, there cannot be any basis or justification for considering those profit/loss in the case of the assessee on the basis of mere presumption or suspicion. It is not the case of the Revenue that such alleged profit has actually been received by the assessee." 12. The present issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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