Anand Nemichand Banvat, Jalgaon V. Income-tax Officer, Ward - 1 (3), Jalgaon

ITA 388/PUN/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0819 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Transactions in derivatives
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.388/PUN/2019 नधा रण वष / Assessment Year : 2010-11 Anand Nemichand Banvat, Plot No.47, Gangamoti, Ayodhya Nagar, Near Raisoni School, Jalgaon – 425 001 PAN : AIBPB5721A Vs. ITO, Ward-1(3), Jalgaon (Appellant) (Respondent) आदेश / ORDER PER S.S. GODARA, JM : This assessee’s appeal for AY 2010-11 arises against the CIT(A)-1, Nashik;s order dated 10-12-2018 passed in case No. Nsk/CIT(A)-1/147/2017-18 involving proceedings under Section 143(3) r.w.s.147 of the Income Tax Act, 1961 in short the Act. Case called twice. None appears on assessee’s behest. He is accordingly proceeded ex parte. 2. Coming to the assessee’s sole substantive grievance on merits that both the lower authorities have erred in law and on facts in disallowing in adding an amount of Rs.3,17,961/-, it is found that the same represented losses derived from “Client Code Modification” in connivance with share market brokers. Appellant by None Respondent by Shri Arvind Desai Date of hearing 26-05-2022 Date of pronouncement 30-05-2022 ITA No. 388/PUN/2019 Anand N. Banvat 2 The CIT(A)’s detailed discussion affirming the Assessing Officer’s action to this effect reads as under : “6.1 In this case, information was available on record that some assessees including the appellant in connivance with brokers has misused the Client Code Modification Utility of NSE/BSE in order to create bogus loses and shifting the profits to other person. The appellant, being one of the beneficiaries of the CCM, the income to the extent of Rs.3,17,709/-, being contrived income, the assessment was reopened u/s 147as the appellant in connivance with broker namely, M/s Exclusive Securities Ltd has misused the client code modification (CCM) utility on NSE/BSE in order to Contrive Losses and profits creating net reduction in the income of Rs.3,17,961/-. The Assessing Officer, therefore made an addition of Rs. 3,17,961/- to the returned income. 6.2 The assessing officer has elaborately discussed from Para 4 in the assessment order and has discussed the issue of misuse of Client Code Modification, the broker has failed to furnish the requisite details and information as required for inquiries by the AO and in Para 6 of the assessment order, the appellant was asked to furnish the details & information, but failed to do so. The relevant portion of para 6 is reproduced as below:- "6. During the course of assessment proceedings, the assessee was asked to furnish details of day wise transactions of F&O, Securities and Commodities along with substantive documents, copy of contract note, copy of global report on profit and loss on account of trading in F & O , Securities and Commodities, details of broker through which all said transactions were made, details of transaction made by changing Client Code. Considering non compliance a show-cause notice was issued on 19/12/2016 to comply by 26/12/2016. The assessee was made aware that failure to furnish the information by 26/12/2016 will compel to finalize the assessment on the basis of material available on records. But till date the assessee has not furnished required details. Instead of furnishing details the authorized representing of the assessee engaged in raising objections, which was already disposed off by passing speaking order.” ITA No. 388/PUN/2019 Anand N. Banvat 3 6.3 On perusal of the above stated facts, it is seen that, the addition made by the assessing officer is on the basis of the documentary evidences and it was also established that, as per SEBI's report, the brokers along with other beneficiaries including the appellant have misused the Client Code Modification Utility of NSE/BSE in order to create bogus loses and shifting the profits to other persons. The documents available with the assessing officer shows that, the appellant contrived losses of Rs.1,27,367/- and contrived profits out of Rs.4,45,328/-.Therefore, the net reduction in income due to Client Code Modification is Rs. 3,17,961/- and the same is treated as unexplained income and is added back to the total income of the appellant.” 3. It is clear from the above extracted CIT(A) detailed discussion that the assessee has not even filed the corresponding detailed evidence in either of the lower proceedings. This is coupled with the fact that he has also not pleaded even violation of principles of natural justice. I accordingly confirm the impugned addition and reject the assessee’s sole substantive ground. 4. This assessee’s appeal is dismissed. Order pronounced in the Open Court on 30 th May, 2022. Sd/- (S.S.GODARA) JUDICIAL MEMBER प ु णे Pune; दनांक Dated : 30 th May, 2022 Satish ITA No. 388/PUN/2019 Anand N. Banvat 4 आदेश क त ल प अ े षत / Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. 4. 5. The CIT(A)-1, Nashik The Pr.CIT-2, Nashik वभागीय त न ध, आयकर अपील!य अ धकरण, प ु णे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड फाईल / Guard file. आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 26-05-2022 Sr.PS 2. Draft placed before author 27-05-2022 Sr.PS 3. Draft proposed & placed before the second member -- JM 4. Draft discussed/approved by Second Member. -- JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.