TaxTMI 
TaxTMI 
2022 (5) TMI 215
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....g ground No.2 of the appeal, challenging reopening of assessment u/s. 147 of the Income Tax act, 1961 ( in short ' the Act'). The ld. Authorized Representative for the assessee narrating the facts of the case submitted that the addition of Rs.8,33,792/- on account of client code modifications has been made by the Assessing Officer merely on surmises and conjectures without appreciating the facts on record. The ld. Authorized Representative for the assessee submitted that there were eight instances of client code modifications during the relevant period. Out of eight, in seven cases client code modifications was within the family members, i.e. father, brother and brother's wife. As per the guidelines issued by National Stock Exchange(NSE) c....
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....he ld. Authorized Representative for the assessee submitted that the Assessing Officer has made addition on account of client code modifications primarily on the basis of information received from DIT(C&CI). No documents has been furnished by the Revenue to show that the name of the assessee or assessee's broker is mentioned in the list of fictitious transactions carried out to suppress losses by misusing the facility of client code modification. The ld. Authorized Representative for the assessee placed reliance on following decisions in support of his submissions: (i) DCIT vs. M/s. Comet Investment Pvt. Ltd. ITA No.5689/M/2017, for A.Y.2010-11 decided on 13/05/2019. (ii) DCIT vs. Sunil J. Anandpur, ITA No.3132/Mum/2015 for A.Y 2010-11....
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....sactions. Genuine client code modifications are permissible. As per the guidelines issued by NSE, client code modifications within the relatives, as defined under the provisions of Companies Act, 1956 is allowed. The assessee has categorically stated that client code modifications in the instant case are among the family members. This fact has not been disputed by the Revenue. No material has been brought on record to show that any penal action has been taken by Stock Exchange or SEBI against the broker of the assessee for carrying out fictitious client code modifications for suppression of profits. The observations made by Assessing Officer in para 4 of assessment order that brokers are indulging in transferring fictitious losses to differ....