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TMI Blog2022 (12) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation and found that through some unscrupulous brokers, various entities are fictitiously increasing or reducing their profit or loss from share transaction by availing client code modification. The investigation report clearly reveals that the assessee is one of the beneficiary of client code modification. Since, the details relating to assessee s share transaction was not examined due to processing of return u/s 143(1) of the Act, the report of the Investigation Wing, which was subsequently received by the AO, clearly constitutes a tangible material based on which the AO certainly can form a belief of escapement of income. In my view the decision of the Hon ble Bombay High Court in case of M/s. Coronation Agro Industries Ltd. [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved or receivable of securities units etc. shall be ignored. However, the conditions enumerated in clause (a), (b) and (c) have to be fulfilled. Since, due to lack of proper compliance by the assessee, the factors enumerated in clause (a) and (b) could not be examined, I deem it appropriate to grant one more opportunity to the assessee to establish through proper documents its claim that disallowance made under section 94(7) of the Act is either unjustified or excessive. Accordingly, the issue is restored back to the Assessing Officer for fresh adjudication after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes. - ITA No.6267/Del/2019 - - - Dated:- 27-10-2022 - SHRI SAKTIJIT DEY, JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such information, the Assessing Officer formed a belief that income chargeable to tax for the assessment year under dispute has escaped assessment. Accordingly, he reopened the assessment under section 147 of the Act. 4.2 In course of assessment proceeding, the Assessing Officer called for the details relating to share transaction of the assessee. After perusing the details and other information available on record, the Assessing Officer was of the view that by availing the facility of client code modification to its benefit, the assessee had reduced its income by creating fictitious loss to the tune of Rs. 1,20,732/-. Whereas, he shifted out profit to the tune of Rs.5,89,142/-. Further, he observed that for availing the facility of cli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ronation Agro Industries Ltd. Vs. DCIT, 394 ITR 464 and various other decisions. 4.5 Without prejudice to the aforesaid submission, learned counsel for the assessee submitted, there are various factual inaccuracies in the reasons recorded and the Assessing Officer was not sure whether the assessee has claimed loss or profit by misusing client code modification. Thus, he submitted, the reopening of assessment under section 147 of the Act is invalid. 4.6 Learned Departmental Representative, on the other hand, submitted that the Assessing Officer has received concrete information indicating that the assessee suppressed its income by availing the facility of client code modification through some unscrupulous broker. 4.7 I have consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Agro Industries Ltd. (supra) would not apply to the facts of the assessee s case, as, in that case there was already assessment made under section 143(3) of the Act. In view of the aforesaid, I do not find any merit in these grounds. Accordingly, ground nos. 1 and 2 are dismissed. 5. Ground nos. 3, 4 and 6 relate to the additions made on account of client code modification. As discussed earlier, while completing the assessment, the Assessing Officer held that the profit/loss from share transaction shown by the assessee through client code modification is non-genuine. 5.1 Before me, learned counsel appearing for the assessee reiterated the stand taken before the Departmental Authorities. He submitted, a confirmation of the broker w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the additions made on account of client code modification including the commission paid are upheld. Ground nos. 3, 4 and 6 are dismissed. 6. In ground no. 5, the assessee has challenged disallowance made under section 94(7) of the Act. 6.1 The grievance of the assessee is, due to paucity of time the assessee could not furnish details relating to long term capital loss and the dividend income earned in respect of which the Assessing Officer has sought information. He submitted, though, before the first appellate authority the assessee did furnish some evidence, however, learned Commissioner (Appeals) completely ignored them. He submitted, the entire dividend income earned of Rs.28,58,113/- cannot be considered for disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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