2022 (1) TMI 1485

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.... appeal is, that the appellant is a broker. The respondent carried out an inspection of the broking operations of the appellant for the period from April 1, 2015 to September 30, 2016. Based on the inspection, a show cause notice dated October 15, 2018 was issued to show cause as to why an inquiry should not be held and penalty should not be imposed for misuse of the funds of the clients with and violating SEBI circular dated November 18, 1993 and circular dated September 26, 2016 read with Regulation 26(xiii) of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 (hereinafter referred to as 'Stockbrokers Regulations'). The AO after considering the replies and the evidence on record has passed th....

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....ecifically given a finding that the circular dated September 22, 2016 is not applicable for the inspection period in question and that the irregularity will be considered on the basis of the circular of November 18, 1993. In view of the aforesaid, the first contention raised by the learned counsel for the appellant does not hold any merit. Further, we do not find any reason which would show that the conclusion arrived at by the AO indicating mismatch of the client securities is based on the mechanism given in the circular of September 26, 2016. 6. With regard to the second contention, we find that the AO in paragraph no. 20 has noted that the appellant did not provide any justification for the mismatch between total credit balance of clien....