Client code modification transactions already recorded in books cannot be taxed again through separate duplicative additions.

Client code modification entries carried out by the broker, and not at the assessee's instance, were already reflected in the assessee's trading account and profit and loss account. In those circumstances, separate additions for fictitious purchase, fictitious sale, and the profit element could not be sustained, because the same turnover and resulting income would be taxed again. The tribunal held that once the transactions and their profit are disclosed in the regular books, no duplicative addition can be made on the same entries. The Revenue's challenge therefore failed and the additions were deleted.

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Issues: Whether separate additions could be sustained towards fictitious purchase, fictitious sale, and profit arising from client code modification transactions when the related turnover and profit were already reflected in the assessee's trading account and profit and loss account.

Analysis: The disputed client code modification entries were found to have been carried out by the broker and not at the instance of the assessee. The purchase and sale figures arising from those entries formed part of the assessee's disclosed trading account, and the profit generated from the transactions was also reflected in the regular books of account. In these circumstances, the same transactions could not be assessed again by making separate additions for the purchase side, the sale side, and the profit element, as that would amount to taxing the same disclosed turnover more than once.

Conclusion: The separate additions were not justified and were rightly deleted; the Revenue's challenge failed.

Ratio Decidendi: Where client code modification transactions are already accounted for in the assessee's regular books and trading results, no separate addition can be made again for the same entries or their resulting profit.

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