TaxTMI 
TaxTMI 
2025 (11) TMI 461
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.... done by the Assessing Officer without issuing the notice u/s. 143(2). 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in invoking the provisions of Section 292BB without appreciating the fact that it does not apply in a case where the Assessing Officer has failed to issue the notice. 3. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in upholding the reopening of the assessment u/s. 147. 4. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of 90,87,025 which was being made on the ground that the appellant had shifted profits to that extent through client code modification. 5. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has failed in appreciating the fact that the modification in the client code was being made for genuine purpose (rectifying the error of punching the trade in the appellant's code instead of his wife's code) and, i....
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....e was CCM in only 8 trades on 23.05.2011.Although modification is allowed within an extended period even after closure of trading hours, the modification in this case was done within a time lag of not more than three minutes from the original trade. Mrs.Jalpa Doshi is the wife of Harendra Joshi who is karta of the assessee HUF. Details of trades are narrated in paras 8 to 17 of the appellate order. It is also submitted that the whole approach of the AO alleging shifting of profit was erroneous and contrary to the modus operandi adopted in other cases as per the assessment order. The broker's confirmation was not appreciated. The said broker was also not involved in enquiries conducted by the Wing as emanating from the contents of the AO who has referred to 'some brokers' / '12 brokers' of a 'few clients' etc. Reliance has been placed on various coordinate bench decisions involving similar issue decided in favour of the assessee's. Without prejudice, it was also submitted that these trades resulted in a loss of Rs 27,155/- in the hands of Mrs. Jalpa Doshi which defies the conclusion that profit was shifted by the assessee to her. The ld.DR has placed reliance on the orders of author....
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.... the Investigation Wing unless the AO has independently analysed the transactions and has arrived the findings. We would also like to place reliance on a latest decision of the coordinate bench in the case of Hasmukh Khetshi Shah in ITA No. 5932/Mum/2024 dated 23.04.2025 in which also similar decision was rendered in favour of the assessee as under: "16. We have heard the parties and perused the material available on record. The information was received from DIT (I & CI), Mumbai to the effects "that fictitious profit & losses, were created by some brokers by misusing the client code modification in F&O segment on NSE and the broker had misused the CCM facility only for commission and Assessee is one of the beneficiaries of such bogus profit to the tune of Rs. 48,93,183/-" and therefore the case of the Assessee was reopened u/s 147 of the Act. 19. We by perusing the orders passed by authorities below and the submission made by the Ld. D.R. observe that the role of the Assessee in client code modification has not been established clearly. Whereas, admittedly the Assessee has provided every detail of the transactions carried out through broker namely M/s. Pashupati C....
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....ter hearing the Assessee, the Assessing Officer made additions in the income of the Assessee on such basis. The issue eventually reached to the Tribunal. The Tribunal did accept the Revenue's theory of misuse of client's code modification facility. However, the Tribunal accepted the Assessee's explanation and discarded the Revenue's theory that profit of the Assessee's company were passed on to the clients. It was also noticed that the Revenue has not contended that the client code modification facility is often misused by the Assessee to pass on losses to the investors, who may have sizable profit arising out of commodity trading against which such losses can be set off. The Revenue normally points out number of such instances of client code modifications as well as nature of errors in filling of the client code. At any rate, what can be taxed in the hands of the present Assessee is the income escaping assessment. Even if the Revenue's theory of the Assessee having enabled the clients to claim contrived losses, the Revenue had to bring on record some evidence of the income earned by the Assessee in the process, be it in the nature of commission or otherwise....