The Tax Publishers2020 TaxPub(DT) 0025 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 147

On perusal of reasons recorded, it was clear that AO had obtained objective details towards modifications occurred in client codes in relation to assessee whereby quantum of profit/losses allegedly shifted was recorded. AO had not merely acted on information simplicitor received from investigation wing as alleged but had also obtained client specific data showing systematic modifications in client code resulting in reduction of taxable income. A soft copy of such data was also provided to assessee. In these circumstances. Belief entertained by AO was not arbitrary or irrational and there was no error on the part of AO to exercise powers under section 147.

Reassessment - Reason to believe - AO not merely acted information simplicitor received from investigation wing as alleged by assessee -

Assessee carried out trading on platofirm of stock exchange through registered broker. AO received inforamtion from investigation wing as to assessee having misused Client Code Modification (CCM) facility misused for tax evasion by reallocation of profits from one client to another. Accordinlgy, AO reopened assessment and made addition. It was case of assessee that AO couldnot have formed reason to belief contemplated undr section 147 but had merely acted on the basis of some abstract information received from investigation wing.Held: On perusal of reasons recorded, it was clear that AO had obtained objective details towareds modifications occurred in client codes in relaton to assessee whereby uantum of profit/losses allegedly shifted was recoded. AO had not merely acted on information simplicitor received from investigation wing as alleged but had also obtained client specific dat showing systematic modifications in client code resulting in reduction of taxable income. A soft copy of such data was also provided to assessee. In these circumstances. Belief entertained by AO was not arbitrary or irrational and there was no error on the part of AO to exercise powers under section 147.

Distinguished:Coronation Agro Industries Ltd. v. Dy. CIT (2017) 390 ITR 464 (Bom.) : 2017 TaxPub(DT) 520 (Bom-HC) and Varshaben Sanatbhai Patel v. ITO (2015) 64 Taxmann.com 179 (Gujarat) : 2015 TaxPub(DT) 4992 (Guj-HC).

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 143(3) Section 147

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