KOOLKIDS FASHIONS PVT. LTD.,,KOLKATA vs. ITO, WARD 9(1),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.2292/KOL/2025 Assessment Year: 2013-14 Koolkids Fashions Pvt Ltd....................................................................................Appellant C/o. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata- 700069. [PAN No. AAKCK4098D] Vs. ITO, Ward 9(1), ..…………..…………………....…….................................….Respondent P-7 Chowringhee Square, Esplanade, Chowringhee North, Bow Barracks, Kolkata- 700069 Appearances by: Siddharth Agarwal, Advocate, appeared on behalf of the Appellant. Madhumita Das, Addl. CIT, Sr. DR.,appeared on behalf of the Respondent. Date of concluding the hearing : June 29 , 2026 Date of pronouncing theorder : July 16 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 01.10.2025 of the National Faceless Appeal Centre (NFAC), passed under Section 147 of the Assessment Year 2013-14 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). 2. The brief facts of the case of the assessee is that the assessee filed its return of income on 24.08.2013 for A.Y 2013-2014 declaring a total income of Rs.31.23.487/- Then the case of the assessee was reopened on the basis of alleged information that client code modification was happened in the case of the assessee. Then notice u/s, 148 and subsequently notices u/s 143(2) and 142(1) were issued. In response to the said notices, the assessee submitted various

ITA No.2292/Kol/2025 Assessment Year- 2013-14 documents.The learned AO passed order by making an addition of Rs. 57,35,800/-by holding that assessee is a beneficiary of transaction through the misuse of client code modification. Being aggrieved by and dissatisfied the assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed. 3. The Ld. AR challenges the very impugned order thereby submitting that the Ld. CIT(A) as well as Ld. AO were not justified in making an addition of Rs. 57,358,00/- on the alleged ground that the same is contrived transaction artificially generated through the misuse of client code modification. The Ld. AR submits that all trades were excluded on the National Spot Exchange Limited platform and as per the national Spot Limited Rules and regulation the buy quantity and sell quantity must be same in the part contract.The Ld. AR by filing copy of circular ref. No. NSEL/TRD/2011/122 relating to client code modification submitted that trades done were modified within the prescribed time limit of the exchange and modification were also accepted by the exchange and these were genuine manual mistakes occurred during of trade by the dealer in entering the trades. The Ld. AR has also filed the copy of ITR acknowledgement, computation of income and final accounts.The Ld. AR further submits that it was not a bogus transaction through client code modification as the assessee was unaware of client code modification since it was managed by the registered broker and not by the assessee.It has further been submitted by the assessee that original client and modified client are the same so there is no question of any change through client code modification hence question of tax evasion cannot arise. The Ld. AR further submits that documentary evidences have been submitted by the assessee at the time of the assessment proceedings such as copy of acknowledgment bank statement, broker, ledger against notice u/s 142(1) reply against show cause notice and contract notice so the 2

ITA No.2292/Kol/2025 Assessment Year- 2013-14 allegation regarding non-submission of the documentary evidences as held by the AO are baseless. The Ld. AR cited following decision which are as follows:- 1. Nimesh Maheshbhai Shah HUF vs Income Tax Officer (2025 171 taxmann.com 24 Gujarat) 2. Swastik Securities vs DCIT, CC-1(2), Kolkata (ITA No. 1017/Kol/2023) 3. Lasco Chemie (P) Ltd vs Income Tax Officer (2026 185 taxmann.com 338 Delhi- Tribunal) Contrary to that Ld. DR submits the impugned order.

We further find that on 10,10.2012 assessee had purchased 4 quantity of STLTMTKR25 in from of commodities at a price of Rs 45960.00 each commodity (trade time 5.21 pm) which was contract 3

ITA No.2292/Kol/2025 Assessment Year- 2013-14 trading timing as per NSEL guideline through its registered broker AUM Commodity Services Pvt Ltd, having Membership Code 10460 and the same 4 quantity of commodities were sold on the same date (trade time 6.13pm) at a price of Rs 46840.00 each commodity and earned profit of Rs 31799.00 the transaction was done through bank channel Therefore, there is no question of fictitious /bogus transactions through client code modification.

We further noticed that on 28 ,08.2012 assessee purchased 13 quantity of RAWWOOLLH2 in from of commodities at a price of Rs 708.00 each commodity (trade time 12.15 PM) as per NSEL guideline through its registered broker AUM Commodity Services Pvt Ltd, having Membership Code 10460 and the same 13 quantity of commodities were sold (trade time 12.15 pm) at a price of Rs 720.80 each commodity and earned profit of Rs 76939.00 the transaction was done through bank channel. The said transactions were done in less than a minute therefore, the scope of client code modification is next to impossible.

(Date of Order : 07.01.2025)

ITA No.2292/Kol/2025 Assessment Year- 2013-14 2. Swastik Securities vs DCIT,CC-1(2),Kolkata (ITA No. 1017/Kol/2023)

(Date of Order : 21.12.2023)

(Date of Order : 19.06.2024)

In the result, the appeal of the assessee is allowed.

Kolkata, the 16th July , 2026.

Sd/- Sd/-

[Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member DC Dated:16 .07.2026.

ITA No.2292/Kol/2025 Assessment Year- 2013-14

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches

ITA No.2292/Kol/2025 Assessment Year- 2013-14