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Vineet Malhotra C/o M/s RRA Tax India, D-28, South Extension, Part-1 New Delhi Vs. ACIT Circle-61 (1) New Delhi
April, 21st 2021

1 ITA No. 7533/Del/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘SMC-1’ NEW DELHI

BEFORE SHRI R. K. PANDA ACCOUNTANT MEMBER
AND

MS SUCHITRA KAMBLE, JUDICIAL MEMBER

I.T.A. No. 7533/DEL/2018 (A.Y 2010-11)
(THROUGH VIDEO CONFERENCING)

Vineet Malhotra Vs ACIT

C/o M/s RRA Tax India, D-28, Circle-61 (1)

South Extension, Part-1 New Delhi

New Delhi

AAZPM1434B (RESPONDENT)

(APPELLANT)

Appellant by Sh. Somil Agarwal, Adv
Respondent by Ms. Shivani Bansal, Sr. DR

Date of Hearing 09.03.2021

Date of Pronouncement 20.04.2021

ORDER
PER SUCHITRA KAMBLE, JM

This appeal is filed by the assessee against order dated 25/09/2018
passed by CIT(A)-20, New Delhi for assessment year 2010-11.

2. The grounds of appeal are as under:-

“1. (a) That having regard to the facts and circumstances of the case, Ld.
CIT(A) has erred in law and on facts in not quashing the impugned
reassessment order passed by Ld. AO u/s 147/143(3), more so when the
same is passed without assuming jurisdiction as per law and without
complying with the mandatory conditions of section 147 to 151 of the Act.
1( b) That in any case and in any view of the matter, action of Ld.CIT(A) is
not quashing the impugned reassessment order framed by Ld. A.O u/s
147/143(3), is beyond jurisdiction, , bad in law and against the facts and se
2 ITA No. 7533/Del/2018

and the same is no sustainable on various legal and factual grounds.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A)
has erred in law and on facts in confirming the action of Ld. AO in making
addition of Rs. 1,75,600/- on account of shifting of profit due to alleged share
trading loss/transactions by using client code modification, more so when
assessee has claimed loss of Rs.44,638/- in the return of income and
impugned addition has been made and that too by recording incorrect facts
and findings and without providing the entire adverse material used against
the assessee and without observing the principles of natural justice.
3. That in any case and in any view of the matter, action of Ld. CIT(A) in
confirming the action of Ld. AO in making addition of Rs. 1,75,600/-, is bad in
law and against the facts and circumstances of the case.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A)
has erred in law and on facts in not reversing the action of Ld. AO in charging
interest u/s 234D of income Tax Act, 1961.

3. The assessee is an advocate by profession and derived income from
business or profession, income from house property, income from capital gain
and income from other sources. Return of income was filed on 1/10/2010
declaring total income of Rs.24,75,040/-. The Assessing Officer made addition
of Rs. 1,75,600/- in respect of difference between the profit which has been
shifted out in respect of loss due to Client Code Modification.

4. Being aggrieved by the assessment order, the assessee filed appeal before
the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5. The Ld. AR submitted that at the initial stages, the assessee has claimed
loss of Rs. 44,638/- in the return of income for which the Assessing Officer
3 ITA No. 7533/Del/2018

has given an incorrect finding that the assessee never claimed loss. The
assessee further submitted that the assessee was not aware at any time
whether any Client Code Modification has been done by the broker. The Ld. AR
submitted that any activity related to Client Code Modification done by the
broker and not by the assessee on its own and the assessee always relied on
the statement of broker for the purposes of profit or loss earn/incurred by the
assessee on the transaction of shares/securities entered by him and the
assessee was not ware of any Client Code Modification activity done by the
broker. The Ld. AR also submitted that as relates to Ground No. 1, the
reassessment u/s 147/143 (3) is beyond jurisdiction bad in law and against
the facts and circumstances of the case and the same is not sustainable on
various legal and factual grounds.

6. The Ld. DR relied upon the assessment order and the order of the CIT(A).

7. We have heard both the parties and perused the material available on
record. It is pertinent to note that the assessee has claimed loss of
Rs.44,638/- and at no point of time was aware about the Client Code
Modification. All the details which were given by the assessee was before the
Assessing Officer and at no point of time, the assessee was responsible for the
Client Code Modification. The evidences and the circumstances clearly set out
that assessee has never indulged into Client Code Modification and the same is
confirmed from the broker which is enclosed at Page 33 of the paper book. The
material available is that there is a Client Code Modification done by the
assessee’s broker but there is no evidence emerging from the records which
concludes that the assessee was involved in Client Code Modification and the
same was done to escape assessment of a part of its income. Neither the
Assessing Officer nor the report of Investigation wing has provided any reason
or documents or statement which could establish that the client code
modification has resulted in the shifting of the profit and the assessee has
received back equivalent amount of cash or any monetary benefits. Further,
4 ITA No. 7533/Del/2018

M/s Century Finvest Pvt. Ltd. in its response to information sought by the
Assessing Officer u/s 133(6) of the Act has clarified that no client code
modification occurred during the Financial Year 2009-10 in the account of the
assessee. These facts were not disputed by the Assessing Officer. The Ld. AR
relied upon the decision of the Hon’ble Bombay High Court in case of M/s
Coronation Agro Industries Ltd. Vs. DCIT WP No. 2627/2016 order dated
23/11/2016 which is apt in the present case. Thus, the CIT(A) was not right in
confirming the addition. The appeal of the assessee is allowed.

8. In result, the appeal of the assessee is allowed.
Order pronounced in the Open Court on this 20th Day of April, 2021

Sd/- Sd/-
(R. K. PANDA) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER
JUDICIAL MEMBER
Dated : 20/04/2021
R. Naheed * ASSISTANT REGISTRAR
Copy forwarded to: ITAT NEW DELHI
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
5 ITA No. 7533/Del/2018

Date of dictation 10.03.2021
Date on which the typed draft is placed 10.03.2021
before the dictating Member 20.04.2021
Date on which the typed draft is placed 20.04.2021
before the Other Member 20.04.2021
Date on which the approved draft
comes to the Sr. PS/PS 20.04.2021
Date on which the fair order is placed 20.04.2021
before the Dictating Member for 20.04.2021
pronouncement
Date on which the fair order comes
back to the Sr. PS/PS
Date on which the final order is
uploaded on the website of ITAT
Date on which the file goes to the
Bench Clerk
Date on which the file goes to the Head
Clerk
The date on which the file goes to the
Assistant Registrar for signature on the
order
Date of dispatch of the Order

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