TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 399
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....grounds raised by the assessee in quantum proceedings in ITA No. 2239/Mum/2023 are reproduced as under: The Learned ACIT 20(3) has erred in disallowing loss in F&O amounted to Rs. 37,28,681/- due to change in client code modification done by broker. The Learned ACIT 20(3) has erred in addition of loss of Rs. 37,28,681/- due to change in client code modification done by broker to normal business income instead reducing the same from speculation loss of Rs. 73,86,173/determined as per assessment order passed u/s 143(3). 3. Briefly stated facts of the case are that the assessee is engaged in trading activity of the shares including both delivery based transaction and non-delivery based transactions. For the year under consideration, the ass....
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.... was one of the beneficiary of tax evasion by way of client code modification on stock exchange and taking excess loss of Rs. 37,28,681/-. In view of the information, the Assessing Officer recorded reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 18.03.2015. The reassessment proceedings u/s 147 of the Act was completed on 23.03.2016 wherein the Assessing Officer disallowed the loss of Rs. 37,28,681/- and also disallowed proportionate brokerage charges which was worked out to 1,49,147/-. On further appeal, the Ld. CIT(A) upheld disallowance of Rs. 37,28,681/- observing as under: "6.1 The appellant contended that the Learned ACIT 20(3) has erred in addition of loss of Rs. 37,28,681/- due to change in....
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....commission. In the submission the appellant admitted the transaction not recorded in the books of account which means the financial impact involved in it is settled out of the resources not disclosed to Income Tax. The decision of the Assessing Officer of disallowed the loss of Rs. 37,28,681/- is right and legal and no need to interfere. In view of the above the appeal is dismissed." 4.2 Before us the Ld. Counsel for the assessee submitted that the Ld. Assessing Officer has reopened the case merely for the reason to suspect that client code modification has been done for nongenuine purpose but without any evidence to support and there was reason to believe that income chargeable to tax had escaped assessment. The Ld. Counsel submitted that....
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....had been executed by the broker and it was not the duty of the client to make changes on the stock exchange. The assessee had no access to the system of stock exchange. All the entries in client code were made as per the contracts and bills of the broker and the assessee had no knowledge of the changes made. Therefore, the AO and Ld CIT(A) are not justified in disallowing the loss to the assessee. 5.2 We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the Assessing Officer has disallowed the loss of Rs. 37,28,681/- on the allegation of the client code modification on exchange portal was carried out by the broker of the assessee for benefitting the assessee by way ....
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....e raised the additional ground challenging the validity of the penalty levied on the ground that relevant limb for levy of the penalty i.e. concealment of the particulars of income or furnishing of inaccurate particulars of the income, has not been stricken off in the notice u/s 274 r.w.s. 271(1)(c) of the Act and thus penalty is not sustainable. The additional ground raised being legal in nature and no investigation of the fresh facts required same was admitted for adjudication. 8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has filed a copy of the notice dated 28.03.2013 issued by the Assessing Officer u/s 274 r.w.s. 271(1)(c....
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.... principles of prejudice. One of the principles is that "where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, "except in the case of a mandatory provision of law which is conceived not only in individual interest but also in the public interest". 190. Here, section 271(1)(c) is one such provision. With calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling with or dilution. For a further precedential prop, we may refer to Rajesh Kumar v. CIT[74], in which the Apex Court has quoted with approval its earlier judgment in State of Oris....