TaxTMI 
TaxTMI 
2026 (8) TMI 541
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....short), Delhi for the assessment year (A.Y. for short) 2014-15. 2. At the outset, we will deal with the appeal filed by the department. The solitary issue arising for consideration is in relation to deletion of addition of an amount of Rs. 3,05,75,681/- as unexplained cash credit u/s. 68 of the Act on account of Client Code Modification. 3. Briefly the facts are, the assessee is a resident individual and derives income from salary, business, investment, dividend, etc. For the assessment year under dispute, the assessee filed her return of income declaring income of Rs. 21,34,700/-. It transpires from the assessment order that subsequently the information was received by the Assessing Officer ('A.O.' for short) that Serious Fraud Inves....
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....e income of the assessee. 4. The assessee contested the aforesaid addition by filing an appeal before the first appellate authority. 5. In course of proceedings before the first appellate authority, the assessee furnished the details of commodity transaction done by her in the relevant financial year. The assessee also referred to the letter of the broker, wherein the broker admitted that the Client Code Modification was not under the instructions of the assessee but on his own. The assessee also relied upon various judicial precedents to buttress her submission. 6. After considering the submissions of the assessee and appreciating the materials available on record, ld. First appellate authority ultimately concluded that the assess....
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....vocably demonstrates that Client Code Modification, if any, was neither in the knowledge of the assessee, nor she had instructed the broker to do so. Further, A.O. has not specified the details of transactions undertaken by the assessee where client code is modified. Thus, when the Client Code Modification, if any, was undertaken by the broker, without any involvement or knowledge of the assessee, the assessee cannot be punished for such conduct of the broker that too when there is no specific allegation that the assessee derived any positive gain through such transactions. In case of Aashish Niranjan Shah vs. UOI [2024] 167 taxmann.com 561 (Bom), the Hon'ble Jurisdictional High Court while dealing with the identical issue has held as u....
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....se of Pr. CIT vs. Pat Commodity Services Pvt. Ltd. in ITA No. 1257 of 2016 vide order dated 15.01.2019, the Hon'ble Jurisdictional High Court has held as under: 3. The respondent assessee is a private limited company engaged in the business of providing commodity services to its clients. In the return of income filed by the assessee for the Assessment Year 2006-07, the Assessing Officer noticed that there were instances of client code modifications. The Assessing Officer believed that the same was done to indulge in circular trading to pass on profits or losses to the clients of the assessee company as per requirements. After hearing the assessee, the Assessing Officer made additions in the income of the assessee on such basis.....