TaxTMI 
TaxTMI 
2026 (9) TMI 111
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....acts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 96,42,854/- without appreciating the fact that the assessee has failed to establish genuineness of transactions and assessee in connivance with the broker has misused client code modification facility to reduce taxable income. 2) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 96,42,854/- as the addition was made on the basis of information received from the Investigation Wing, Mumbai and there was sufficient evidence regarding modification done by the assessee to suppress the profit. 3) The appellant craves leave to amend or alter or add a new ground ....
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....ned cash credit u/s 68 of the Act and added to the total income while completing the assessment u/s. 147 r.w.s.144B of the Act vide order dated 15/05/2023. Penalty proceedings u/s 271(1)(c) were also initiated. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). 3. The Ld.CIT(A), upheld the validity of the reassessment proceedings and rejected the assessee's challenge based on alleged violation of principles of natural justice. However, on merits, the Ld.CIT(A) held that the assessee had substantiated the impugned transactions by furnishing documentary evidence including contract notes, broker's ledger, bank statements and transaction details, and that the Ld.AO had failed to bring any cogent....
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....le Bombay High Court in Peter Vaz v. CIT (2021) 436 ITR 616. Accordingly, we admit the assessee's application under Rule 27 and proceed to adjudicate the legal issue raised therein before considering the revenue's appeal on merits. We have heard the rival submissions and perused the material available on record. As the assessee invoked Rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963, challenging validity of the reassessment proceedings, we deem it appropriate to adjudicate the jurisdictional issue at the threshold, as its determination would have a direct bearing on the maintainability of the reassessment itself. 5. The Ld. AR submitted that the addition made by the Ld. AO is based solely on generalized inform....
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....ed transactions had escaped assessment or had not been subjected to tax. No evidence was brought on record to establish any collusion between the appellant and the broker or to show that the client code modifications were intended to evade taxes. 5.3. The Ld. AR contended that the entire addition rests merely on suspicion arising from the fact that the transactions were routed through M/s. Anand Rathi Commodities Pvt. Ltd. Such suspicion, howsoever strong, cannot substitute legal evidence. The Ld. AO neither could establish any fraud in the transactions nor could demonstrate any tax evasion attributable to the assessee. It was therefore submitted that, once the assessee discharged the burden of furnishing the requisite details and explan....
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....Revenue, this established that the purchases were initially executed in the names of other clients and were later transferred to the assessee through client code modification, enabling the assessee to derive fictitious profits without making the corresponding purchases in its own name. 5.7. It was therefore contended that the Ld.AO had rightly concluded that the assessee had earned fictitious profits of Rs.96,42,854/- through client code modifications and, since the explanation offered by the assessee was not found satisfactory, the addition under section 68 of the Act was liable to be sustained. We have heard the submissions advanced by both sides in the light of records placed before us. 6. It is noted that the sole basis for mak....
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....d irregularities on the NSEL platform, no material has been brought on record to demonstrate how such general findings translate into undisclosed income in the hands of the present assessee. We also note that there is no evidence to show that the profits credited in the assessee's books did not arise from the recorded transactions or that the amounts represented unexplained cash credits. Mere reliance on investigation reports or generalized allegations, without establishing a live nexus with the assessee's own transactions, cannot justify an addition under section 68 of the Act. 6.3. The Ld.CIT(A), after examining the assessment records, rightly observed that the Ld.AO failed to rebut the assessee's explanations, failed to po....