| The Tax Publishers2020 TaxPub(DT) 3789 (Del-Trib) INCOME TAX ACT, 1961
Section 147
As there was no material to infer that client code modification had been done with mala fide purpose of shifting of profit or evasion of tax and income had escaped due to such client code modification, reopening of assessment done on this count was treated as invalid.
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Reassessment - Validity - No live-link between material before AO and inference made -
AO on the basis of information received from investigation wing reopened assessment on the reasoning that client code modification had been carried out by the broker in case of assessee. For shifting of profit or loss by assessee. Assessee challenged this. Held : According to information available in reasons recorded, client code modification was allowed to only brokers by the stock exchange, within a limited window of time after business hours, for rectification of any mistakes in punching of client code while carrying out transaction of purchase and sale on behalf of customers. There was no material to infer that such client code modification had been done with mala fide purpose of shifting of profit or evasion of tax and income had escaped due to such client code modification. Accordingly, there was no live-link between material before AO and the inference made and therefore, reassessment was set aside as invalid.
Relied:M/s. Coronation Agro Industries Ltd. v. DCIT 2017 TaxPub(DT) 0520 (Bom-HC): (2017) 390 ITR 464 (Bom-HC), Simmi Sethi v. ITO ITA No. 6809/D/2018, dated 22-10-2019, Radiance Stock Traders (P) Ltd. v. ITO 2018 TaxPub(DT) 7895 (Del-Trib), Kamal Kishoree Aggarwal v. ACIT ITA No. 6628/D/2018, dated 12-4-2019, AKG Securities & Consulting Ltd. v. ITO ITA No. 4395/D/2019, dated 27-2-2020 and Sanjay Kumar Jain v. ITO ITA No. 825/D/2019, dated 25-7-2019
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, DELHI 'SMC-2', NEW DELHI BENCH
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