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TMI Blog2022 (5) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... e or SEBI against the broker of the assessee for carrying out fictitious client code modifications for suppression of profits. The observations made by AO assessment order that brokers are indulging in transferring fictitious losses to different clients to reduce the tax liability, are generic. There is no specific allegation of such fictitious client code modification supported by cogent evidence to suggest that the broker of the assessee at the instance of assessee or the assessee has indulged in such nefarious activities. Assessee has pointed that during the First Appellate proceedings the assessee requested to provide copy of remand report. Despite repeated requests, the copy of remand report was not furnished to the assessee. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciating the facts on record. The ld. Authorized Representative for the assessee submitted that there were eight instances of client code modifications during the relevant period. Out of eight, in seven cases client code modifications was within the family members, i.e. father, brother and brother s wife. As per the guidelines issued by National Stock Exchange(NSE) client code modifications among the family members is permissible. Undisputedly, the assessee is not a broker but an investor. Client code modifications are carried out by the brokers. The Assessing Officer had issued notice u/s. 133(6) of the Act to the broker. In response to the notice the broker confirmed that client code modifications were carried out. The broker has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o suppress losses by misusing the facility of client code modification. The ld. Authorized Representative for the assessee placed reliance on following decisions in support of his submissions: (i) DCIT vs. M/s. Comet Investment Pvt. Ltd. ITA No.5689/M/2017, for A.Y.2010-11 decided on 13/05/2019. (ii) DCIT vs. Sunil J. Anandpur, ITA No.3132/Mum/2015 for A.Y 2010-11 decided on 15/0-9/2017. (iii) Sambhavnath Investments vs. ACIT in ITA No.3109/Mum2011 for A.Y.2006-07 decided on 31/12/2013. 4. Per contra, Shri T. Shankar representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. 5. Both sides heard, orders of authorities below examined. The ground No.1 and 7 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue. No material has been brought on record to show that any penal action has been taken by Stock Exchange or SEBI against the broker of the assessee for carrying out fictitious client code modifications for suppression of profits. The observations made by Assessing Officer in para 4 of assessment order that brokers are indulging in transferring fictitious losses to different clients to reduce the tax liability, are generic. There is no specific allegation of such fictitious client code modification supported by cogent evidence to suggest that the broker of the assessee at the instance of assessee or the assessee has indulged in such nefarious activities. 5.2 The ld. Authorized Representative for the assessee has pointed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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