Income Tax Officer, Delhi vs. Vishwas Kohli

Parties Involved

Facts Summary

The assessee, Vishwas Kohli, is engaged in the business of share and commodity trading and had earned commission income. A notice under section 148 of the Income-tax Act, 1961 was issued to the assessee on 08.09.2015, which was neither attained finality nor reached its logical end. Another notice under section 148 was issued on 30.03.2017, and the Assessing Officer made an assessment, adding Rs.49,48,210/- under section 144 r.w.s. 147 of the Act, 1961. The assessee claimed that he was not aware of the Client Code Modification (CCM) that passed on a share trading loss of Rs.49,48,210/- in the account of the assessee due to CCM. The assessee also submitted that he had not made any transaction with M/s. CPR Capital Services Limited during the financial year 2009-10 or thereafter. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) and partly allowed the appeal. The Revenue is in appeal before the ITAT.…

Legal Issues

• 1. Whether the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs.49,48,210/- made by the Assessing Officer on account of non-genuine loss claimed through Client Code Modification (CCM) in the Futures & Options segment.
• 2. Whether the Ld. CIT(A) has erred in failing to appreciate that Client Code Modification is a recognized and organized method of tax evasion, and that in the present case losses were systematically shifted into the assessee’s account with no commercial rationale or evidence of genuine trading furnished by the assessee.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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