SANTOSH SONAWANE,MUMBAI vs. INCOME TAX OFFICER WARD 2, PANVEL

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ITA 4493/MUM/2018Status: DisposedITAT Mumbai29 July 2019AY 2010-113 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee had conceded the addition before the CIT(A) by signing the order sheet. Since the assessee accepted the matter at the lower appellate stage, they cannot agitate the same issue further.

What were the facts?

The Assessing Officer (AO) added Rs 2,01,595/- to the assessee's income, representing a loss claimed through client code modification (CCM). The AO suspected this was done to siphon out profit and reduce taxable income.

What were the issues?

Whether an assessee can challenge an addition before the ITAT after having conceded to it before the CIT(A). The issue of the validity of client code modification for claiming losses was also involved.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI

Before: Shri Shamim Yahya

For Respondent: Shri Chaitanya Anjaria
Hearing: 03.07.2019Pronounced: 29.07.2019

O R D E R This is an appeal by the assessee directed against order of learned CIT(A)-2, Thane, dated 14.05.2018, pertaining to assessment year 2010-11.

2.

The issue raised in this appeal is that learned CIT(A) erred in sustaining addition of ` 2,01,595/- being loss claimed through client code modification. Brief facts of the case are that during the year, as per the AO, the, assessee had reduced his income by Rs 2,01,595/- through CCM and in the absence of any valid explanation, the AO had added the same to the income of the assesses. As per the AO information was received from ADIT(Inv) Unit 1(3), Ahmedabad that the assessee, Shri Santosh K Sonawane, having PAX AQWPS0060Q, had siphoned out profit due to CCM generating loss of Rs 2,01,595/-, therefore, the same was required in be verified. In view of these facts the AO recorded necessary reasons/satisfaction that the income to the extern of Rs 2,01,595/-, for AY 2010-11 had escaped assessment and, accordingly, reopened the case by issuing notice u/s 148 of the Act, which was duly served upon the assessee. In compliance it was submitted that the return filed with the department may be treated as return filed in compliance to the said notice. The AO also provided copy of reasons recorded for his information and necessary compliance. In compliance the assessee denied having done any trading by CCM and also challenged the reopening of the case. The Assessing Officer, however, rejected the objections raised by the assessee, vide order dated 27.10.2017 giving detailed findings at page No 4 to 8 of the assessment order. The AO after considering the submissions, did not accept the contention of the assessee and held that modification of client code is a practice under which broker change client code in sale and purchase orders of securities, after trades are conducted. Further held that while it is legally permitted to rectify inadvertent error in punching the orders, there are concerns that such modifications could he misused for manipulative activities in the market and accordingly the assessee had generated loss of Rs 2,01,595/-, thereby reduced its taxable income, by using CCM and accordingly taxed the said amount.

3.

Up on assessee's appeal learned CIT-A noted that the learned counsel of the assessee, vide order sheet noting dated 10/5/2018, has accepted the addition and stated that assessee was not interested in pursuing this ground in appeal. Taking this concession into account the learned CIT-A dismissed this ground. Now the assessee has filed appeal against this before the ITAT.

4.

I have heard the learned departmental representative. None appeared on behalf of the assessee despite notice.

5.

Up on careful consideration, I note that the learned counsel of the assessee has duly conceded for the addition/disallowance before the learned CIT-A by signing on the order sheet. This is an issue of bogus booking detected by the Investigation Wing. The assessee having conceded the matter before the learned CIT-A has now raised appeal before the ITAT. There is no whisper as to why the matter having been conceded before the learned CIT-A is now being challenged.

6.

In my considered opinion the assessee having conceded before the learned CIT-A on a matter of fact cannot agitate the same further. Accordingly, this appeal raised by the assessee stands dismissed.

Order pronounced in the open court on this day of 29th July, 2019.

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