TaxTMI 
TaxTMI 
2017 (5) TMI 1715
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....ta u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 28.12.2011 for assessment year 2009-10. Shri Sallong Yaden, Ld. Departmental Representative represented on behalf of Revenue and Shri N.K. Poddar, Ld. Senior Advocate appeared on behalf of assessee. 2. Only issue raised by the Revenue in this appeal is whether the ld CIT(A) is right in allowing the loss of Rs. 20,17,97,265/- on account of derivative activities. 3. Briefly stated facts are that the assessee is a private Limited company and engaged in trading in shares, investments and granting of loans. The assessee, in the year under consideration has claimed losses under derivative activities for the amount of Rs. 20,17,97,265/-. ....
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....SBPL submitted that changes were carried out in the client code as per the instructions of assessee company. In view of above, the AO called upon the assessee to clarify the reasons for the change of client codes. The assessee in response thereto submitted that ICMPL has admitted that the modification in client code was carried out due to typographical errors whereas the ASSBPL has not submitted any correspondence from the assessee suggesting for client code. All the changes made in the client code were in the knowledge of the NSE and all the entire transactions were matching between the brokers and assessee-company. However, the AO disregarded the contention of the assessee and disallowed the impugned loss by adding it to the total income ....
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....ves (future & option) aggregating to Rs. 20,14,86,105/- on account of future and option loss incurred by the appellant through the stock broker M/s India Capital Markets Pvt. Ltd. Therefore, the disallowance made by the AO s hereby deleted. As regards the disallowance of Rs. 3,11,160/- made by the AO on account of future and options los sisncurred through stock broker M/s Alchemy Shares and Stock Brokers Pt. Ltd., it is noticed that the statement given by the director of M/s Alchemy Share & Stock Brokers that 'Yes, I have gone through the client code modifications date in soft copy. We had no mala fide intention for doing this. It was only done as per the instructions given by the above mentioned client M/s Amrabathi Investra Ltd. ....
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....nt codes which have been modified as per the Notification No. 14/2011 issued by the CBDT dated 09.03.2011. It is also important to note that the broker has been dealing with various clients but the client code was modified only in respect of the assessee. Therefore, the genuineness of the transactions cannot be relied upon. He heavily relied on the order of AO. On the other hand, the ld. AR before us filed a paper book comprising of pages from 1 to 157 and submitted that there was no discrepancy between the date supplied by the NSE and the assessee. Indeed the clients codes were modified and this action was carried out and updated in the stock exchange. The issue of disallowance of the loss arises where there is mismatch in the records o....
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....o transfer the profit to other persons by modifying the client code so as to avoid the payment of tax. It is undisputed fact that the client code was modified fewer number of times and this fact was very much in the knowledge of the stock exchange. It is because that the information for the modification of the client code was gathered by the AO from the NSE which proves beyond doubt that the assessee has not modified any client code without informing to the NSE. Had there been mismatch in the code between the report submitted by the broker of the assessee and that of the NSE, the question/doubt on the genuineness of the transaction arise? Therefore, we are unable to find out any justification for the allegation of the AO that the client cod....