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modification is permitted by both SEBI and Stock exchanges so as to take care of the human error that occurs during the entry of client codes both by the broker or the client. The AO alleged that non genuine CCM were carried out to book contrived losses. In some case, this facility was used by brokers to transfer gains or losses from one Individual to another by modifying client codes in the guise of rectifying an error. It became a practice to book artificial profit & loss in March to impact tax liabilities. He alleged that the loss or profit is just on paper. Then he reiterated the non- genuine errors mentioned by NSE.

In this regard, it is submitted that the facility of Client Code Modification is a facility where Stock Exchange allows the trading Members post close of market for 30 minutes to facilitate the rectification of genuine mistake(s) /error(s) in punching the client code at the time of punching the order in online system of trading, which is likely to occur, being human error, during the normal course of trading as the trading members are required to enter the Client Code at the time of order entry in the National Exchange for Automated Trading (NEAT) system. It is submitted that stock market remains volatile wherein the prices of shares and securities fluctuate with every passing fraction of minute and time is the essence of trading therefore, during the course of trading certain genuine and human error(s) of punching of wrong client code happen inadvertently and it is in such type of situations there occur certain genuine mistakes/errors which are M/s Mahalaxmi Brokerage India Pvt. Ltd.

It was further submitted that the rectifications made through client code modification facility in the name of the Assessee have been duly owned by the Assessee and the same are also being reflected in the accounts as well as the return of the Assessee and also duly reported to the compliance agency. Moreover, these transactions were neither disputed by any person and nor the transactions where client code modification was carried out were claimed by any other persons. In other words had the client code modification facility been misused in favor of the Assessee, the same would have resulted in some kind of dispute by the person in whose account/client code such transactions were originally punched / transferred subsequently. It is thus submitted that no such dispute has arisen solely for the reason that all the orders have been correctly included in the appropriate client code which vouch for the factum of genuine transactions which suffered from certain genuine human errors. It is further submitted that no material / documents were brought on record to show that any other income in the form of cash which has not been accounted for in the books of the Assessee has been received by the Assessee. It is submitted that assessment proceedings were concluded by ld. AO on the basis of drawing adverse inferences against the assessee without confronting the statements of such persons/clients during the course of assessment proceedings and without providing opportunity to cross examine, which is contrary to the principles of natural justice.

arbitrarily alleged that the transaction pertaining to losses have been made with the ulterior motives of reduction in the profits earned therein. Later on, on enquiry from the broker, it was found that during the year under consideration total transactions in F&O segment of NSE traded by the broker company M/s Maverick Share Brokers Pvt. Ltd. were to the tune of 34,05,727 (APB 21-26 ) and corresponding F&O trade done by the assessee during the previous year were 1,43,533 (APB 27-32) out of which the alleged trades pertaining to CCM are only 50 transactions which is 0.031% of the total trade done by the assessee and very negligible if compared with the total trade done by the broker. Since the alleged modified trade is quite less than 1% of the total trade and as stated in earlier paras, same has occurred due to human error.