Income Tax Appellate Tribunal Delhi Dcit, New Delhi vs M/S Gen X Commodities (P) Ltd.,, New ... on 25 July, 2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI "A" BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.3560/Del/2016 [Assessment Year : 201011] DCIT vs M/s. Gen X Commodities (P) Ltd., Central Circle29 FA45, Shivaji Enclave New Delhi New Delhi110027 PANAAACA2303H APPELLANT RESPONDENT Revenue by Shri Jitender Singh, CIT DR Assessee by Shri Ved Jain, Adv. & Shri Ayush Garg, CA Date of Hearing 26.06.2025 Date of Pronouncement 25.07.2025 ORDER PER MAHAVIR SINGH, VP : The captioned appeal has been filed by the Revenue against the order of the First Appellate order dated 30.03.2016 passed by Commissioner of Income Tax (A)30, New Delhi ["CIT(A)"] u/s 250(6) of the Income Tax Act, 1961 pertaining to assessment year 201011. 2. The Revenue has raised following grounds of appeal: a) "On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in deleting additions made on account of client code modifications(CCM). b) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in holding that the CCM done by assessee company is within permissible limit and ignoring the fact that the CCM done by the sister concern M/s Futurz Next Services Ltd. though which profit of the assessee company was reduced by Rs. 8.82 crore is done through back office. c) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in holding that the CCM done by assessee company is within permissible criteria, thus, ignoring the fact that the CCM was done in the code of certain entities only and the modified client code were not similar to the original client code, the values of client code was significant and other conditions laid down by stock exchanges. d) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in directing the AO to delete disallowance made u/s 14A. e) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by deleting the addition of Rs. 60,40,87,544/ made on account of deemed dividend u/s 2(22)(e) of the Act. f) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in holding that all the transactions with JCPL are business transaction, thus, ignoring the fact that assessee company is a client of JCPL and it was obliged to pay only the profit earned by the assessee company. g) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by deleting the addition of Rs. 2,88,90,000/ was made on account of loss on sales of shares. h) On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in not appreciating that the purchase of shares of group company and sale thereof to the another group company is just a colourable device to create artificial loss. i) That the order of the CIT(A) is erroneous and is not tenable on facts and in law." 3. Ground No.(a), (b) & (c) of the Revenue's appeal concerns additions on account of Client Code Modification ("CCM"). 4. The assessee is engaged in the business of trading of commodities. The assessee is a client of its group company M/s. J.P. Capital Services Ltd. ("JSPL") and Futurz Nest Services Ltd. in respect of transaction in NSE and commodities. The AO observed that client codes have been modified in the back office by Futurz Next Services Ltd. The AO thus for the reasons mentioned in the assessment order, made an addition of INR 7,65,00,355/ on account of client code modification. 5. Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A) reversed the addition made by the AO. The relevant operative para is reproduced hereunder: 8.4. "I have carefully considered assessment order, written submission, case laws relied upon and oral arguments of Ld. AR. The objections/arguments of the appellant, are dis