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TMI Blog2023 (12) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... being on presumption that the client code modification carried out was for non-genuine purposes. Accordingly, the addition made by the AO and upheld by the Ld. CIT(A) being based on the presumption and being without supporting any documentary evidence that assessee has evaded the tax on those transactions and shown fictitious loss, is deleted and the order of Ld CIT(A) is set aside. The grounds of appeal of the assessee are accordingly allowed. Penalty u/s 271(1)(c) - Defective notice u/s 274 - Assessee argued that relevant limb for levy of the penalty i.e. concealment of the particulars of income or furnishing of inaccurate particulars of the income, has not been stricken off in the notice u/s 274 r.w.s. 271(1)(c) - HELD THAT:- We find that the AO has not stricken off the relevant limb for levy of the penalty and not specified whether the penalty has been initiated for concealment of particulars of income or furnishing inaccurate particulars of income. The Hon ble Bombay High Court in the case of Mohd Farhan A Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT] held that where penalty notice has not specified for charges for levy of the penalty, whether it is for concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also disallowed proportionate BSE/NSE charges by allocating the same in proportion of turnover of delivery and non-delivery based transaction which amounted to Rs. 24,09,366/-. In this manner, the Assessing Officer made total disallowance of Rs. 73,86,173/- (i.e. speculation loss of Rs. 49,76,807/- + BSE/NSE charges of Rs. 24,09,366/- incurred toward speculation transaction) and said loss of Rs. 73,86,173/- was allowed to be carried forward for subsequent years. 4.1 Subsequently, the Assessing Officer had received information from the office of the Director of the Income-tax, Mumbai that assessee was one of the beneficiary of tax evasion by way of client code modification on stock exchange and taking excess loss of Rs. 37,28,681/-. In view of the information, the Assessing Officer recorded reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 18.03.2015. The reassessment proceedings u/s 147 of the Act was completed on 23.03.2016 wherein the Assessing Officer disallowed the loss of Rs. 37,28,681/- and also disallowed proportionate brokerage charges which was worked out to 1,49,147/-. On further appeal, the Ld. CIT(A) upheld disallowance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel submitted that in the reasons recorded details of transaction of client code modification by the broker has not been pointed out and therefore entire reasons to believe being based on the suspicion , the reassessment is bad in law and need to quashed. The Ld. Counsel for the assessee in support of his contention relied on the decision of the Hon ble Bombay High Court in the case of M/s Coronation Agro Industries Ltd. v. DCIT in WRIT PETITION NO. 2627 OF 2016, wherein it is held the reason does not indicate basis for the Assessing Officer to make reasonable belief that there had been an escapement of the income due to client code modification by the broker of the assessee was on account of non-genuine error originally occurred while punching the trade. 5.1 As far as the ground of the assessee on merit is concerned, the ld Counsel of the assessee submitted that the Assessing Officer in the impugned order has provided detail note on the client code modification procedure but nowhere mentioned the list of the transaction in the case of the assessee where client code modification has been alleged carried out by the broker of the assessee. The Assessing Officer has also nowher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned ACIT 20(3) has erred in levying penalty of Rs. 27,11,625/- levied on certain disallowances made while passing order u/s 143(3). 7. Before us, the Ld. Counsel of the assessee raised the additional ground challenging the validity of the penalty levied on the ground that relevant limb for levy of the penalty i.e. concealment of the particulars of income or furnishing of inaccurate particulars of the income, has not been stricken off in the notice u/s 274 r.w.s. 271(1)(c) of the Act and thus penalty is not sustainable. The additional ground raised being legal in nature and no investigation of the fresh facts required same was admitted for adjudication. 8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. Before us, the Ld. Counsel of the assessee has filed a copy of the notice dated 28.03.2013 issued by the Assessing Officer u/s 274 r.w.s. 271(1)(c) of the Act. On perusal of the said notice, we find that the Assessing Officer has not stricken off the relevant limb for levy of the penalty and not specified whether the penalty has been initiated for concealment of particulars of income or furnishing inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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