2024 (8) TMI 812

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.... 2. The facts relating to the above said issue are discussed in brief. The assessee is a carrying on business in Indus, coal etc. The AO received information that certain stock brokers were manipulating F & O transactions in the stock market in order to generate bogus losses and gains. The modus operandi was that certain group of traders will sell stock options at an unreasonably lower price without any corresponding off setting position in the underlying scrip. Later, during the course of the day, those stock options will be bought back at market rates, which are usually substantially higher. These transactions will result unusual loss to a group of persons and huge gains to some other persons. This system of operation was called revers....

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.... transactions of the assessee should not be considered to be bogus in nature. The Ld CIT(A) was not convinced with the submissions of the assessee. He took the view that it is the responsibility of the assessee to prove that the transactions are genuine. However, the assessee has failed to do so. Further, the loss has arisen due to change and modification of client code done by the broker, which fact proves that the loss was generated and shifted to the assessee. Accordingly, he confirmed the disallowance made by the AO. 5. We heard the parties and perused the record. We notice from the assessment order that the assessing officer has fully relied upon the report of the investigation wing with regard to the alleged manipulative practices ....