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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 (AY
2 2014-15) and (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 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 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 & 98/Viz/2020. It is ordered accordingly.
Now, with respect to Ground No.3 ( 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 ( ) 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 in the case of Smt. A. Harshitha. It is ordered accordingly.
6 7. Similarly, in the assessee (Smt. A.
Ammaji) has raised an identical issues vide Ground No.2 and 3 of her original appeal. Since, we have taken 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 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.