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| The Tax Publishers2019 TaxPub(DT) 8271 (Del-Trib) INCOME TAX ACT, 1961
Section 153A
Assessee was not a member of any exchange and could not execute CCM and transactions on account of CCM done by group concerns were not found to be false or untrue and SEBI or the stock exchange had not taken any action treating the transactions to be non-genuine and volume of CCM occurred was within the limit allowed by SEBI. Also, AO nowhere in the assessment order had mentioned any statement of broker of assessee regarding admission of any CCM. Also, there was nothing on record to suggest that CCM was done at the behest of assessee and no addition or adverse view was taken in case of other person with whose accounts presumption was being made that transaction had been shifted. Therefore, no addition in assessee's hands could be made by AO where CCM were done by the broker.
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Search and seizure - Assessment under section 153A - Addition on account of client code modification (CCM) in case of assessee, engaged in share trading, etc., - Assessee not being member of stock exchange but a client of alleged brokers
Assessee-company was engaged in trading of shares securities and commodities through recognized member of exchange. During search in case of assessee. AO noticed that assessee company was a client of registered broker M/s.Jaypee Capital Services Ltd. and Fututz Next Services Ltd. and evidences of Client Code Modifciation CCM done by these companies in their own account as well as in the accounts of client were found. Accordingly, AO made addition on account of CCM in assessee's hands on the ground that in case of member (broker) group companies of assessee, it was held that CCM was by and large not for genuine reasons and for extraneous consideration and assessee had suppressed its income. Assessee's case was that CCM was internal matter of broker and assessee had no control over it.Held: Assessee was not a member of any exchange and could not execute CCM and transactions on account of CCM done by group concerns were not found to be false or untrue and SEBI or the stock exchange had not taken any action treating the transactions to be non genuine and volume of CCM occurred was within the limit allowed by SEBI. Also, AO nowhere in assessment order had mentioned any statement of broker of assessee regarding admission of any CCM. Also, there was nothing on record to suggest that CCM was done at the behest of assessee and no addition or adverse view was taken in case of other person with whose accounts presumption was being made that transaction had been shifted. Therefore, no addition in assessee's hands could be made by AO where CCM were done by the broker.
Relied:Dy. CIT v. Comet Investment (P.) Ltd. [vide ITA No.5802/Mumbai/2017, Order, dt. 13-5-2019] : 2019 TaxPub(DT) 5407 (Mum-Trib).
REFERRED :
FAVOUR : In assessees favour.
A.Y. : 2011-12
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