TMI Blog2022 (12) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... d following grounds of appeal: 1. The action of the Assessing officer in initiating proceedings u/s 147 and issuing notice u/s 148 based on information of DIT Ahmedabad is unjust, illegal, arbitrary, illusory may directed to be quashed. 2. The action of the Assessing officer in making an addition of Rs. 24,19,643/- by treating as profit of company shifted to clients is unjust, illegal, arbitrary, illusory uncalled for. 3. That his action in treating the transactions of Rs. 24,19,643/- entered into through clients code modification as deliberate and planned shifting of profits of appellant company to other clients is unjust, illegal, arbitrary, illusory uncalled for. 4. The action of the CIT(A) in not accepting the explanations given by the appellant company and the broker company M/s Narayan Securities Limited regarding the transactions of Rs. 24,19,643/- and adding the same to the income of the appellant company is unjust, illegal, arbitrary, illusory uncalled for. 5. Appellant craves leave to add, alter, modify or delete any ground of appeal either before or at the time of hearing of the appeal. 2. At the time of hearing no one attended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 148 after analysing the details of information received with the information is available in the return of income (pages 10 to 16 of the paper book). 4.1.2 It is an admitted fact that the return filed earlier was merely processed under section 143(1). In the case of Indu Lata Rangwala vs DC1T [(2016) 384 ITR 337 (Delhi)], the Hon'ble Delhi High Court have held that where initial return of income is processed under section 143(1), it is not necessary in such a case for the AO to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment. It has also been held that whereas in a case where the initial assessment order is under section 143(3), and it is sought to be reopened within four years from the expiry of the relevant assessment year, the AO has to base his 'reasons to believe' that income has escaped assessment on some fresh tangible material that provides the nexus or link to the formation of such belief. In a case where the initial return is processed under section 143(1) of the Act and an intimation is sent to the assessee, the reopening of such assessment no doubt requires the AO to form reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings were initiated based on the information received from DIT (Investigation), Ahmedabad. From the reasons recorded for issue of notice under section 148 (pages 14 to 16 of the paper book) it is seen that the said notice was issued only after analysing the details as given in thp information. In view of the discussion above, the facts of the case and the position of law, it is held that there is no infirmity in the initiation of reassessment proceedings. Ground of appeal NLo. 1 is dismissed. 4.2 Grounds of appeal Nos. 2, 3 and 4 challenge the addition of Rs. 24,19,643/- on account of transactions entered into through client code modification. Since these grounds of appeal are interlinked, these are being adjudicated together. 4.2.1 The AO after a detailed discussion on the modus operandi relating to client code modification and the facts of the case and also based on the transactions entered into by the appellant held that profit of Rs. 24,19,643/- had been shifted out by the assessee and the same was added back to the total income of the assessee. The appellant has submitted that the client code modification entries were punched and by the broker and tire assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tants (P) Ltd. (Director Ashish Saraf) GP 15. Panchsheel Securities (P) Ltd. (Director Ashish Saraf) PA 16. Ashish Saraf HUF AAA 17. Sandeep Saraf SSS 18. Santosh Devi Poddar SU316 19. B.K. Jain BK 20. Rekha Pradeep Kumar Aggarwal JE106 21. Reecha Aggarwal SU17 22. Ankita Aggarwal SU202 23. Swati Agrawal CSA78 24. D K Arora HUF CDH04 25. Subh karan Bhura SU323 26. Akhil Bishwanath Agarwal D76 27. Rajeev G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s involving client code modification are with a few parties who also are parties related to the appellant and/or represent a specific group. For instance, transactions have been entered into with Guardian Portfolio Consultants (P) Ltd and.Panchsheel Securities (P) Ltd where the director is Shri Ashish Saraf who also happens to be the Director of the appellant company and also with Ashish Saraf F1UF. Sandeep Saraf also appears to be a related party'. Similarly, transactions involving cLient code modification were entered into with Dalip Daga Sons HUF (Karta Dalip Daga) and Srirnad Fiscal Sen ices (P) Ltd (Director Dalip Daga) which form one specific group of parties. Another set of people who appear to be related parties with whom such transactions were entered into are at serial Nos. 8 to 10 and 11 to 13 of the above table. From further analysis of data, it is noted that in the month of February, 2009, out of the 106 transactions, 44 transactions pertain to Kunjbihari Kasat HUF, Nalini Chandrakant Kasat and Ramakant Ramniwas Kasat. From this it is apparent that the transactions entered into using the facility of client code modification were well thought out transactions ente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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