DCIT Vs Modern India Ltd. (ITAT Mumbai)
In the matter aforementioned ITAT deleted addition made on account of Client Code Modification after observing that assessee utilized its own funds to conduct transactions on NSEL platform and the profits from such transactions have already been offered to tax.
Assessee engaged in manufacturing and trading activities. It filed return at Rs.60,14,050/- and Rs.2,84,14,510/- for AYs 2012-13 and 2014-15 respectively. Assesssment were completed u/s 143(3). Subsequently assessments were reopened on information that the assessee has indulged in bogus transactions through commodity trading in both the assessment years under dispute. Assessee was asked to submit details pertaining to trading in commodities and the transactions which were subjected to client code modification. AO found that assessee notonly entered into commodity trading but such commodity trading was subjected to client code modification. AO concluded that the assessee has indulged in bogus commodity trading activity through Client code modification and added back the amounts of Rs.5,85,94,662/- and Rs.30,97,261/- respectively as unexplained investment u/s. 69 in AY 2012-13 and unexplained cash credit u/s. 68 of the Act in AY 2014-15.
On appeal, CIT (A) held that all the transactions have taken place on NSEL platform. The assessee has offered the income from the disputed transactions there cannot be any escapement income. There is nothing on record to show that assessee is involved in client code modification. Even AO concluded that there was no escapement of income viz-a-viz transaction entered on NSEL platform. Accordingly CIT (A) decided appeal in favour of asseessee.
