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2015 (9) TMI 647 - AT - Income TaxTreatment to Commission on share application made on behalf of PMS clients as income of the assessee - Held that - There is uncontroverted finding in the assessment order as well as in the impugned order that even after set-aside proceedings, the assessee did not produce any evidence in support of its contention that the transaction and subscription was on account of PMS client account, thus, the addition was again made. Even, the submission of the assessee vide letter dated 23/06/2011 were considered and before the ld. Commissioner of Income Tax (Appeals) also no such evidence was produced. Even before us, no evidence was produced by the assessee, therefore, we have no option but to confirm the conclusion drawn by the ld. Commissioner of Income Tax (Appeals) - Decided against assessee. Disallowance of loss on revaluation of securities - Held that - There is uncontroverted finding in the impugned order that the assessee could not produce any evidence for substantiating its claim of proving that it was held as stock in trade. These investment were shown in the category of investment only in the balance sheet to comply with schedule-6 of the company Act. Thus, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals). - Decided against assessee. Disallowance of accrued interest on overdue lease rentals - Held that - Totality of facts clearly indicates that even pursuant to the direction of the Tribunal, the assessee neither filed any basis nor any agreement and merely claimed that it was waived on case to case basis and the circumstances. Even, no such circumstance was adduced before the Assessing Officer /Commissioner of Income Tax (Appeals), thus, we find no infirmity in the impugned order.- Decided against assessee.
Issues:
1. Treatment of commission on share application as income of the assessee. 2. Disallowance of loss on revaluation of securities. 3. Disallowance of accrued interest on overdue lease rentals. Analysis: Issue 1: Treatment of commission on share application The assessee contested the inclusion of Rs. 36 lakhs as income, arguing that the amount received on behalf of PMS clients should not be considered as the assessee's income. The contention was that the commission earned from PMS clients had already been offered as income. However, the authorities found that the assessee failed to provide evidence supporting this claim at various stages, including during appellate proceedings. Despite multiple opportunities to substantiate the transaction as being on account of PMS clients, the assessee did not produce any evidence. Consequently, the addition of Rs. 36 lakhs as income was upheld, affirming the decision of the First Appellate Authority. Issue 2: Disallowance of loss on revaluation of securities The assessee claimed a loss on the revaluation of securities amounting to Rs. 7,48,614, contending that the securities were treated as stock in trade. The argument was supported by the consistent treatment of profits on the sale of such securities as business income. However, the authorities found that the assessee failed to provide sufficient evidence to establish that the securities were held as stock in trade. Despite claiming that the investments were classified as such to comply with regulatory requirements, the assessee could not substantiate this classification. As a result, the disallowance of the loss was upheld based on the lack of evidence supporting the stock-in-trade classification. Issue 3: Disallowance of accrued interest on overdue lease rentals The dispute revolved around the disallowance of Rs. 28,16,398, representing accrued interest on overdue lease rentals. The assessee argued that the uncertainty of realization meant that the interest should not be taxed until actual receipt. However, the authorities noted that the assessee failed to provide any agreements or bases for waiving the penal interest, merely claiming that it was waived on a case-to-case basis. Despite directions to produce evidence supporting the waiver, the assessee could not substantiate the claim. Consequently, the disallowance of the accrued interest was upheld, as the assessee did not provide the required documentation or agreements to support the waiver of interest. In conclusion, the appellate tribunal dismissed the assessee's appeal, upholding the decisions of the authorities regarding the treatment of income, loss on securities, and disallowance of accrued interest. The judgment emphasized the importance of providing concrete evidence and documentation to support claims during tax proceedings.
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