VINEET MALHOTRA,NEW DELHI vs. ACIT, CIRCLE-61(1), NEW DELHI

This appeal is filed by the assessee against order dated 25/09/2018 passed by CIT(A)-20, New Delhi for assessment year 2010-11.

The grounds of appeal

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that at the initial stages, the assessee has claimed loss of Rs. 44,638/- in the return of income for which the Assessing Officer has given an incorrect finding that the assessee never claimed loss. The assessee further submitted that the assessee was not aware at any time whether any Client Code Modification has been done by the broker. The Ld. AR submitted that any activity related to Client Code Modification done by the broker and not by the assessee on its own and the assessee always relied on the statement of broker for the purposes of profit or loss earn/incurred by the assessee on the transaction of shares/securities entered by him and the assessee was not ware of any Client Code Modification activity done by the broker. The Ld. AR also submitted that as relates to Ground No. 1, the reassessment u/s 147/143 (3) is beyond jurisdiction bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.

The Ld. DR relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused the material available on record. It is pertinent to note that the assessee has claimed loss of Rs.44,638/- and at no point of time was aware about the Client Code Modification. All the details which were given by the assessee was before the Assessing Officer and at no point of time, the assessee was responsible for the Client Code Modification. The evidences and the circumstances clearly set out that assessee has never indulged into Client Code Modification and the same is confirmed from the broker which is enclosed at Page 33 of the paper book. The material available is that there is a Client Code Modification done by the assessee’s broker but there is no evidence emerging from the records which concludes that the assessee was involved in Client Code Modification and the same was done to escape assessment of a part of its income. Neither the Assessing Officer nor the report of Investigation wing has provided any reason or documents or statement which could establish that the client code modification has resulted in the shifting of the profit and the assessee has received back equivalent amount of cash or any monetary benefits. Further, M/s Century Finvest Pvt. Ltd. in its response to information sought by the Assessing Officer u/s 133(6) of the Act has clarified that no client code modification occurred during the Financial Year 2009-10 in the account of the assessee. These facts were not disputed by the Assessing Officer. The Ld. AR relied upon the decision of the Hon’ble Bombay High Court in case of M/s Coronation Agro Industries Ltd. Vs. DCIT WP No. 2627/2016 order dated 23/11/2016 which is apt in the present case. Thus, the CIT(A) was not right in confirming the addition. The appeal of the assessee is allowed.

In result, the appeal of the assessee is allowed. Order pronounced in the Open Court on this 20th Day of April, 2021