Case Law Details
Ketan M. Chalishazar HUF Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, recently passed a verdict in favour of Ketan M. Chalishazar HUF in a case against the Income Tax Officer (ITO). The case revolved around a modification error in the client code during a share transaction executed by the assessee’s broker.
The ITAT examined the fact that the client code modification was a mistake committed by the assessee’s broker. The appellant argued that it was an inadvertent error, and the code for an individual was entered instead of that for a Hindu Undivided Family (HUF). The tribunal, after examining the case, agreed with the appellant. The ITAT stated that the Assessee Officer and the CIT(A) did not provide a detailed analysis or specify the trades where the client code modification occurred. As per the records, only one transaction was implicated, which was supposed to occur in individual capacity but was erroneously executed in the HUF capacity by the broker.
Conclusion: The ITAT, in a significant verdict, held that the assessee cannot be held accountable for a genuine mistake made by the broker. The tribunal acknowledged the appellant’s argument that a single transaction was mislabelled due to a broker error. Hence, the addition made by the Assessing Officer was deemed unjustifiable, and the appeal of the assessee was allowed. This case reinforces the need for meticulousness in transactions and underlines the significance of brokers’ roles in ensuring accurate client code entries.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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