2025 (9) TMI 508

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....ct') dated 23.12.2016 by the Assessing Officer, ACIT, Circle-28(1), New Delhi (hereinafter referred to as 'ld. AO'). 2. At the outset, the AR stated that the application filed u/s 27 of ITAT Rules by the assessee on 18.07.2025 was stated to be not pressed by him. Accordingly, the same is hereby dismissed as not pressed. 3. The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in deleting the addition of Rs.3,63,92,847/- made by the ld AO on account of Client Code Modification (CCM) in the facts and circumstances of the instant case. 4. We have heard the rival submissions and perused the material available on record. The return of income for Assessment Year 2009-10 was filed by the assess....

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.... abused the facility of CCM to avoid taxes. The assessee submitted before the ld CIT(A) that he had not been involved in the act of any connivance with the broker to carry out any CCM for his transactions. Either way, the returned loss was of Rs.5.44 crores and even after the disallowance of CCM loss of Rs.3.64 crores, the assessed loss of Rs. 1.80 crores still remain. Hence, there is no need for the assessee to abuse the facility of CCM in connivance with the broker. It was also submitted that merely because the broker had not responded to the notice issued u/s 133(6) of the Act, the assessee could not be penalized. The assessee placed reliance on the various decisions in support of his contentions as under: - A. ITO vs. Amrabathi....

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....pinion that there is no evidence which shows that the appellant has instructed the broker for Client Code Modification and has abused the facility of CCM to reduce his taxable income. The AO has not provided the appellant with any material or statement based on which the AO has arrived at the conclusion that the appellant has misused the CCM facility in order to suppress its taxable income. It is also noted that the appellant was already having a loss and the finding of the AO that the client code modifications was malafide with the intention to transfer in the losses from other person by modifying the client code so as to create a more losses is not supported by any specific finding/material on record. It is also observed that the AO has m....

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.... We find that in Ground No. 1 raised by the revenue, it has been mentioned that the broker had admitted misuse of CCM facilities for contrived loss and shifting of profits. This, in our considered opinion, is factually incorrect and devoid of merit in view of the fact that the ld AO himself had stated in the assessment order that assessee's broker had not responded to the notice issued u/s 133(6) of the Act. While this is so, how the broker could have admitted the misuse of CCM is not answered by the revenue before us. Revenue had also not bothered to bring on record the name of the person from whom the loss is allegedly bought by the assessee by misusing the CCM facility in connivance with the Broker. No SEBI action has been taken either o....