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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 ..... n merits after condoning the delay. 3. In ground nos. 1 and 2, the assessee has challenged the validity of reopening of assessment under section 147 of the Income-tax Act, 1961 (in short 'the Act'). Whereas, in ground nos. 3, 5 and 6, the assessee has challenged the merits of the additions made. 4. At the outset, I will deal with the legal issues raised in ground nos. 1 and 2. 4.1 Briefly the facts are, the assessee is a resident corporate entity. For the assessment year under dispute, the assessee filed its return of income on 29.09.2009 declaring income of Rs.7,71,690/-. The return of income filed by the assessee was processed under section 143(1) of the Act. Subsequently, the Assessing Officer received information from Investigation W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the assessee preferred an appeal before learned Commissioner (Appeals). However, learned Commissioner (Appeals), more or less, upheld the assessment order, except granting partial relief in respect of certain suo motu disallowance made under section 14A of the Act. 4.4 Be that as it may, before me, learned counsel appearing for the assessee submitted that the reopening of assessment is merely on the basis of report received from the Investigation Wing without independent application of mind. He submitted, the reasons recorded do not reveal any finding of the Assessing Officer that the client code modification was not on account of any genuine error. He submitted, merely suspecting that by client code modification income has escaped asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the assessee had artificially reduced its profit by converting it to loss. On a careful reading of the assessment order, it is observed that Investigation Wing of the department has carried out thorough 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 under section 143(1) of the Act, the report of the Investigation Wing, which was subsequently received by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal Representative strongly relied upon the observations of the Assessing Officer and learned Commissioner (Appeals). 5.3 I have considered rival submissions and perused the materials on record. There is no dispute that the assessee has availed the facility of client code modification through a broker. Both the Assessing Officer and learned Commissioner (Appeals), after thoroughly examining the facts have given a concurrent finding that by availing the facility of fictitious client code modification the assessee has shifted out profit from share transaction and converted it to loss. Except the confirmation obtained from the broker, the assessee has been unable to furnish any other conclusive evidence, either before the departmental author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisite documents/informations were not furnished despite repeated reminders. Therefore, the Assessing Officer proceeded to make disallowance under section 94(7) of the Act to the extent of dividend income earned by the assessee. While deciding the issue in appeal, learned Commissioner (Appeals) has also recorded a categorical finding that the assessee did not furnish any detail whatsoever. Though, in the written submission filed before me, the assessee stated that details are enclosed, however, no such details are found on record. 6.4 Be that as it may, on a reading of section 94(7) of the Act, it is quite clear that long term capital loss on purchase and sale of shares, securities etc. not exceeding the amount of dividend or income recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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