TaxTMI 
TaxTMI 
2011 (6) TMI 945
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....tock broker and also as a participant with the two depositories. It claims that it is offering equity broking services to more than half a million clients using both offline and online platforms and also offers depository participant services. The Board carried out inspection of the records of the appellant from September 24, 2007 to October 4, 2007 both in relation to its stock broking activities and depository participant activities for the financial years 2005-06 to 2007-08. During the course of inspection, the inspecting team found a large number of deficiencies/ irregularities committed by the appellant in the maintenance of its records and it submitted to the Board two separate reports, one relating to stock broking activities and the....
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....er 10, 2010, the adjudicating officer imposed a monetary penalty of ` 3 lacs on the appellant on account of the violations committed by the latter. It is against this order that the present appeal has been filed. 2. We have heard the learned counsel for the parties who have taken us through the record and, in the circumstances of this case, we are inclined to exonerate the appellant by giving it the benefit of doubt. We are clearly of the view that the inspection carried out by the inspecting team was faulty which compels us to give the benefit of doubt to the appellant. One of the charges that has been established against the appellant pertains to the discrepancies in the client registration forms and agreements. It is alleged that in as ....
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....for the purpose of the defence, they would not have been left undated. In these circumstances, we cannot but give the benefit of doubt to the appellant. 3. As regards the stamping of agreements, it is alleged that in the case of three clients, the member client agreement was not stamped. The reply of the appellant is that in one of those cases the agreement had been duly franked by the stamp duty officer. This explanation has been accepted by the adjudicating officer. In regard to the other two cases, the appellant pointed out that there were stamp papers duly crossed/cancelled for the purpose of the agreements which were produced along with its reply. The adjudicating officer did not accept this plea of the appellant on the ground that th....
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....r and thereby violated the code of conduct prescribed for the stock brokers. The adjudicating officer has found that the appellant as a stock broker failed to exercise due care and diligence in this regard. The appellant had pleaded that there is no prescribed manner in which such records are to be maintained and that it was maintaining a record in MS-Excel files and that the correspondence with the clients was maintained in their respective files. In the absence of a finding that the appellant was not maintaining record in this regard in MS-Excel files as pleaded, we cannot agree with the adjudicating officer that there was any deficiency on the part of the appellant in maintaining records of investors' complaints. 4. We have carefully pe....