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TMI Blog2020 (2) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961 (for short the 'Act'). 2. Brief facts of the case are that the assessee company engaged in the business of trading in shares and F & O, filed its return of income for the assessment year under consideration declaring the total income of Rs. 1,43,940/- the return was processed u/s 143 (1) of the Act. Subsequently, the assessment was reopened on the basis of information received from DIT (I&C) that the assessee had entered into transactions involving client code modification (CCM) through its broker on NSE in F & O segment. During assessment proceedings, AO called information from the assessee's broker, however, the broker did not provide any details of client code modified trades and provided the copies of voluminous bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case as well as in law, the Learned CIT (A) has erred in confirming the action of the Learned Assessing Officer in disallowing the loss of Rs. 1,61,03,943/- on the alleged plea that the appellant has booked the loss by misusing the clients code modification, without considering the facts and circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Learned CIT (A) has erred in confirming the action of the Learned Assessing Officer in disallowing the claim of interest expenses of Rs. 1,65,205/-, without considering the facts and circumstances of the case." 4. The Ld. counsel for the assessee submitted before us that the Ld. CIT (A) has erred in confirming the action of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtmental Representative (DR) supporting the order passed by the Ld. CIT (A) submitted that since the AO had received a reliable information from DIT (Intelligence and CR Investigation), the AO had rightly reopen the assessment. Hence, there is no infirmity in the findings of the Ld. CIT(A). 6. We have heard the rival submissions of the parties and perused the material on record including the cases relied upon by the Ld. counsel for the assessee and the authorities below in the light of the rival contentions. The reasons recorded for reopening the assessment read as under: "Information has been received from DIT (Intell. & CR. Inv.), Mumbai, vide letter No. DIT (I & CI)/CCM/2014-15 dated 27.02.2015 that fictitious profits and losses were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the beneficiaries in whose account more than Rs. 25 lacs Losses/Profits have been generated through CCM. In this case, assessee has executed the transaction during the F.Y. 2009-10. As per the information received, assessee company is one of the beneficiaries and create fictitious Profit/Loss amounts to Rs. 1,12,08,455/-. Assessee has modified 2,58,47,552 Quantity of shares and the value of shares modified as per the information was to the tune of Rs. 2,23,01,04,598/- resulting into loss of Rs. 1,12,08,485/- due to client code modification". 7. As pointed out by the Ld. counsel, in the case of M/s Coronation Agro Industries Ltd. vs. DCIT (supra), the Hon'ble Bombay High Court has decided the identical issue in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as a matter of regular business practice, a broker in the stock exchange makes modifications in the client code on sale and/ or purchase of any securities, after the trading is over so as to rectify any error which may have occurred while punching the orders. The reasons do not indicate the basis for the Assessing Officer to come to reasons do not indicate the basis for the Assessing Officer to come to reasonable belief that there has been any escapement of income on the ground that the modifications done in the client code was not on account of a genuine error, originally occurred while punching the trade. The material available is that there is a client code modification done by the Assessee's broker but there is no link from there to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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