ITO Vs Munish Bajaj and Sons HUF (ITAT Delhi)
ITAT Delhi held that addition towards earning fictitious profit by misusing Client Code Modification Facility merely on the basis of information received from Investigation wing without carrying out independent investigation is unsustainable in law. Accordingly, appeal of revenue dismissed.
Facts- On the basis of information available with the Department during the year under consideration the assessee was involved in earning fictitious profit by misusing Client Code Modification Facility in F&O segment and the, therefore, was reopened u/s. 148 of the Act.
AO completed the assessment at total income of Rs. 4,26,36,440/- as against returned income of Rs. 14,44,830/- by making disallowance of speculation loss of Rs. 3,47,97,111/- set off by the assessee; disallowance of expenses of Rs. 55,86,819/- and disallowance of commission of Rs. 8,07,680/-.
CIT(A) allowed the appeal and deleted the additions/ disallowances. Being aggrieved, revenue has preferred the present appeal.
Conclusion- It further appears from the records that the Ld. AO has not carried out any investigation on the issue under consideration particularly the engagement of the assessee into Client Code Modification Facility rather relied upon the information received from the Investigation Wing, the Ld. AO failed to demonstrate that the assessee was actually engaged into Client Code Modification Facility and earned fictitious profit/loss.
