A HARSHITA,VISAKHAPATNAM vs. DCIT, CENTRAL CIRCLE-2, VISAKHAPATNAM
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER S. BALAKRISHNAN, Accountant Member :
This Miscellaneous Application is filed by the assessee seeking recalling of the Tribunal order passed in ITA No.97/Viz/2020 (AY
2 2014-15) and ITA No.98/Viz/2020 (AY 2014-15), dated 15/12/2023
in the case of Smt. A. Harshitha and Smt. A. Ammaji.
At the outset, the Ld. AR drawn our attention to the order of
the Tribunal dated 15/12/2023 and submitted that vide Para-8 at
page No. 12 to 17 of the said Tribunal (supra), the Hon’ble ITAT has
held that the assessee is not involved in any manipulation of stock
prices for the purpose of earning bogus LTCG and thereby allowed
the Ground No.2 raised by the assessee in ITA No. 97/Viz/2020
and ITA No.98/Viz/2020. The Ld. AR further mentioned that vide
Para-9, page No. 17 of the order, the Tribunal has allowed the
Ground No.3 raised by the assessee. However, while adjudicating
the Ground No.3, an inadvertent mistake was crept in the
Tribunal’s order i.e., once the Tribunal has come to a conclusion
that the assessee is not involved in obtaining any accommodation
entries for earning LTCG, the question of payment of commission
for obtaining such accommodation entries does not arise and
therefore the question of application of the provisions of section 69C
also does not arise. Hence, the Ld. AR submitted there is a mistake
apparent on record from the order of the Tribunal while giving
3 conclusion with regard to Ground No.3 which is contradicting the
finding of the Tribunal with respect to Ground No.2. Therefore, the
Ld. AR pleaded that for this limited purpose, the order of the
Tribunal dated 15/12/2023 may be recalled and pass the order as
the Tribunal deems fit.
After hearing the Ld. AR and the Ld. DR, we find that there is
a mistake apparent on record while adjudicating the Ground No.3
of the assessee’s appeal in ITA No. 97/Viz/2020 and 98/Viz/2020.
Since the mistake has crept in the Tribunal’s order inadvertently,
we hereby allow the MA filed by the assessee and recall the
Tribunal’s order for the limited purpose of avoiding contradictory
conclusions with respect to Ground No.2 and Ground No.3 of the
assessees appeals in ITA No.97 & 98/Viz/2020. It is ordered
accordingly.
Now, with respect to Ground No.3 (ITA No. 97/Viz/2020 in the
case of A. Harshitha), it is the submission of the Ld. AR that once
the Tribunal has come to a conclusion that the assessee is not
involved in obtaining any accommodation entries for earning LTCG,
the question of payment of commission for obtaining such
4 accommodation entries does not arise and therefore the question of
application of the provisions of section 69C also does not arise as
the commission expenditure itself does not exist. The Ld. AR further
submitted that since the Tribunal has found that the assessee was
not involved in obtaining accommodation entries and having deleted
the addition U/s. 68 of the Act, the addition made U/s. 69C of the
Act by the Ld. AO treating the commission expenditure as
unexplained ought to have been deleted. Instead, the Hon’ble
Tribunal has held that the commission expenditure shall be allowed
as deduction from LTCG. Thus, the Ld. AR submitted that it is
contradicting the finding of the Tribunal with respect to Ground
No.2 and that of the finding in Ground No.3.
However, the Ld. DR has contended that based on the seized
materials, the assessee has incurred commission expenditure
amounting to Rs. 28,03,781/-.
We have heard both the sides and perused the material
available on record as well as the order of the Tribunal dated
15/12/2023. On careful perusal of the Tribunal’s order, we find
that Tribunal has inadvertently erred in adjudicating the
5 commission expenditure as deduction from LTCG. While
adjudicating the Ground No.2 (ITA No.97/Viz/2020) with respect to
treatment of LTCG as unexplained cash credit U/s. 68 of the Act,
this Bench has found that the assessee is not involved in the
manipulation of stock prices for the purpose of earning bogus
capital gains placing reliance on the order of the Hon’ble Securities
Appellate Tribunal, Mumbai wherein the assessee has been
exonerated with reference to the manipulation of stock prices.
Accordingly, Ground No.2 raised by the assessee was allowed by the
Tribunal in the original appeal. Since, this Ground No.2 raised by
the assessee is adjudicated in favour of the assessee, the Ground
No.3 raised by the assessee with respect to commission expenditure
as unexplained expenditure U/s. 69C of the Act deserves to be
deleted. Accordingly, we hereby delete the addition made towards
payment of commission expenditure by the Ld. AO U/s. 69C of the
Act and also allow the Ground No.3 in favour of the assessee in ITA
No.97/Viz/2020 in the case of Smt. A. Harshitha. It is ordered
accordingly.
6 7. Similarly, in ITA No.98/Viz/2020, the assessee (Smt. A.
Ammaji) has raised an identical issues vide Ground No.2 and 3 of
her original appeal. Since, we have taken ITA No.97/Viz/2020 as a
lead appeal for adjudicating the issues involved therein at the time
of passing the order dated 15/12/2023, now the decision taken by
us with respect to Ground No.3 in ITA No.97/Viz/2020 in the
preceding paras of this order mutatis mutandis applies to the
Ground No.3 of the assessee’s appeal in the case of A. Ammaji in
ITA No.98/Viz/2020. It is ordered accordingly.
In the result, MA filed assessee is allowed and the appeals of
the assessees in the case of A. Harshitha and A. Ammaji (ITA No.
97/Viz/2020 and 98/Viz/2020) are also allowed as indicated herein
above.
Pronounced in the open Court on 30th January, 2024.
Sd/- Sd/- (दु�वू� आर.एल रे�डी) (एस बालाकृ�णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) �या�यकसद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER Dated :30/01/2024 OKK - SPS
7 आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- �नधा�रती/ The Assessee – (i) A. Harshitha, D.No. 11-8-34, Daspalla 1. Hills, Visakhapatnam, Andhra Pradesh-530003. (ii) A. Ammaji, D.No. 11-8-34, Daspalla Hills, Visakhapatnam, Andhra Pradesh – 530003. राज�व/The Revenue – DCIT, Central Circle-2, MVP Colony, Sector-8, 2. Pratyakshakar Bhavan, Beside Post Office, Visakhapatnam, Andhra Pradesh-530017. 3. The Principal Commissioner of Income Tax, आयकर आयु�त (अपील)/ The Commissioner of Income Tax 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, 5. Visakhapatnam गाड� फ़ाईल / Guard file 6. आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam
