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2019 (10) TMI 398

..... been upheld by the CIT(A) - HELD THAT:- A perusal of the proforma for approval to issue of notice u/s. 148, copy of which is placed at page 12 of the paper book shows that as per clause 12 of the proforma, the PCIT while giving approval has simply mentioned “satisfied”. Similarly as per clause 11, the Addl. CIT has simply mentioned “Yes”, it is a fit case to issue notice u/s. 148 of the IT Act, 1961. As decided in M/S N.C. CABLES LTD. [2017 (1) TMI 1036 - DELHI HIGH COURT] mere appending of the expression 'approved' says nothing. It is not as if the CIT (A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be refl .....

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..... filed may be treated as return filed in response to notice u/s. 148. The Assessing Officer, during the course of assessment proceedings, concluded that the assessee has purchased exempt long term capital gain through brokers by changing client codes in sale and purchase orders of securities and had claimed the same as exempt. Since the assessee has earned capital gain of ₹ 4,39,342/- and claimed the same as long term capital gain exempt from tax, the Assessing Officer held the same to be non genuine and accordingly made addition of ₹ 4,39,342/-. 4. In appeal the CIT(A), relying on various decisions, upheld the action of the Assessing Officer. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal .....

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..... cided the issue in favour of the assessee and the appeal filed by the revenue has been dismissed. He accordingly submitted that both legally and factually the order of the CIT(A) is not sustainable. 7. The Ld. DR on the other hand heavily relied on the order of the AO and CIT(A). 8. I have considered the rival arguments made by both the sides and perused the orders of the authorities below. I have also considered the various decisions cited before me. I find the Assessing Officer, on the basis of report of the investigation wing of the department, reopened the assessment and made addition of ₹ 4,39,342/- on account of client code modification through broker which has been upheld by the CIT(A). It is the submission of the Ld. Counsel f .....

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..... se appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. 9.2 The Hon ble M. P. High court in the case of CIT Vs. S. Goyanka Lime & Chemicals Ltd. (supra) has held as under :- 7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so Yes, I am satisfied . In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down:- The Commissioner acted, of course, mechanically in order to .....

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..... echanical manner, therefore, in the light of the ratio laid down by the decisions cited (supra) and the other decisions filed in the case law compilation, the reassessment proceedings in my opinion are not in accordance with law. Therefore, the same is liable to be quashed. I, therefore, quash the reassessment proceedings. 10. Even otherwise on merit also, so far as the addition on account of client code modification is concerned I find the Hon ble Bombay High Court in the case of PAT Commodity Services (supra) has observed as under :- 3.The respondent assessee is a private limited company engaged in the Business of providing Commodity services to its clients. In the return of income filed by the assessee for the Assessment Year 200607, the .....

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..... has added the entire amount of doubtful transactions by way of assessee's additional income, which is wholly impermissible. We do not know the fate of the individual investors in whose cases, the Revenue could have questioned the artificial losses. Be that as it may, we do not think entertaining these appeals would serve any useful purpose. 4.In the result, both the appeals are dismissed. 11.Respectfully following the decision of Hon ble Bombay High Court cited (supra). I hold that the addition made by the Assessing Officer and sustained by the CIT(A) on account of client codes modification is not justified. The grounds raised by the assessee are accordingly allowed. 12. In the result, the appeal filed by the assessee is allowed. Order .....

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