TMI Blog2023 (2) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... done for shifting of profit and loss by the assessee particularly when there is no material on record that such client code modification was done with malafide purpose of shifting of profit to evade the tax nor any such material was there before the AO. Initiation of reopening proceedings u/s 147/148 are bad in law and the subsequent assessment order framed by the AO is not sustainable in the eyes of law, hence ordered to be quashed without entering into the merits of the case and consequently impugned order passed by the CIT(A) is set aside. Decided in favour of asseessee. - ITA No.7591/M/2019 - - - Dated:- 23-1-2023 - Shri Kuldip Singh, Judicial Member For the Assessee : Shri G.P. Mehta, A.R. For the Revenue : Shri Pramod Nikalje, D.R. ORDER PER : KULDIP SINGH, JUDICIAL MEMBER: The appellant, Smt. Mayuri A. Shah (hereinafter referred to as the assessee ) by filing the present appeal, sought to set aside the impugned order dated 27.09.2019 passed by Commissioner of Income Tax (Appeals), Mumbai [hereinafter referred to as the CIT(A)] qua the assessment year 2010-11 on the grounds inter-alia that :- 1. The orders passed by the learned lower au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Stock Exchange (NSE) and the assessee is one of the beneficiaries of the said client code modification, reopening proceedings were initiated against the assessee by invoking the provisions contained under section 147/148 of the Act. In response to the notice issued under section 148 of the Act the assessee opted that original return of income filed by her maybe treated as reply to the notice under section 148 of the Act. Reasons recorded were supplied to the assessee, notices under section 143(2) and 142(1) were served upon the assessee. It is brought on record by way of investigation and verification by ADIT (Inv.) that some of the brokers have confirmed that they have misused the facility of client code modification in order to create fictitious losses and profits resulting into tax evasion and they have been receiving commission at the rate of 0.5% to 2% on the amount of losses/profits transferred to their clients. It has also come on record that M/s. BP Equities Pvt. Ltd. provided a loss in share transactions of Rs.9,84,630/- and profit of Rs.1,41,056/- to the assessee. Declining the contentions raised by the assessee the Assessing Officer (AO) proceeded to hold that origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 889450 12500 60904820 12500 60904820 -984630 2009-10 CCM for Profit BR_ID BR_ NAME NAME_ORG_CL PAN_ORG_CL MOD_CL_C D NAME_MOD_CL PAN_MOD_CL SCRIPT_NAME EXP_ DT 11420 BP EQUITIES PRIVATE LIMITED SANTOSH Y MOKASHI AKIPM7137N 27271 MAYURI AJAY SHAH AAJPS1897A STERLINBIO 28-JAN-10 11420 BP EQUITIES PRIVATE LIMITED MAYURI AJAY SHAH AAJPS1897A 27309 SHARMILA PRAMODKU MAR JAIN ACYPJ45 48E PTC 28-JAN-10 11420 BP EQUITIES PRIVATE LIMITED MAYURI AJAY SHAH AAJPS1897A 27309 SHARMILA PRAMODKU MAR JAIN ACYPJ4548E SUZLON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into by the assessee through his broker M/s. BP Equities Pvt. Ltd. as mentioned at serial number 1 of the table extracted in the preceding paras and all other transactions mentioned in the table were found to be correct. 9. First of all the assessee challenged the reopening by the AO by raising additional grounds which are admitted being a purely legal ground on the ground that reason in this case was recorded by Mr. Sandeep Kumar Singh Income Tax Officer 19(2)(3), Mumbai as available at Page 3 of the paper book whereas notice under section 148 of the Act as available at page 1 of the paper book was issued by Mr. Nilesh Talkar, Income Tax Officer wherein he has specifically mentioned that he has reason to believe that assessee s income chargeable to tax for the assessment year 2010-11 has escaped assessment within the meaning of section 147 of the Act. Furthermore the assessee has demanded the statement of M/s. BP Equities Pvt. Ltd. on the basis of which entire case/reopening has been rested which has not been supplied. Then the assessee filed an application under RTI Act and then order was issued by the Income Tax Department available at page 4 of the paper book stating there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sustainable in the eyes of law. 13. Identical issue as to the reopening on the basis of client code modification has been decided by the co-ordinate Bench of the Tribunal in case of M/s. Stratagem Portfolio (P.) Ltd. vs. Dy. CIT in ITA No.7878/Del./2019 in favour of the assessee by returning following findings: 5.4 On perusal of the above reasons, it is evident that the material suggests that client code modification has been carried out by the broker in the case of the assessee. According to the information available in the reasons recorded, client code modification is allowed to the brokers by the stock exchange, within a limited window of time after business hours, for rectification of any mistakes in punching of the client code while carrying out transaction of purchase and sale on behalf of the customers. The Learned Assessing Officer, however has alleged in the reasons recorded that client code modification has been done for shifting of the profit or loss by the assessee. But there is no material to infer that such client code modification has been done with malafide purpose of shifting of the profit or evasion of the tax. There is no material before the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
