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2021 (1) TMI 639 - ITAT MUMBAIAddition of accrued interest on the investments made by the assessee with portfolio management - 20% assured income is guaranteed by the recipient of the amount - AR contentions are that ₹ 4 crore are given for investment in equity shares - HELD THAT:- We find that the concept of real income will come into the picture and only real income will be taxable in the hands of the assessee irrespective of the assessee following mercantile system of accounting or cash system of accounting. In the present case, the assessee has made an investment of ₹ 4 crores and on the assurance that 20% of the assured income by investment in equity will be paid to the assessee. Since there is lapse on the part of the portfolio management person and no interest nor dividend income is received. A.O has estimated the income on such investments. We found that the assessee has not received any income as per the financial statement nor any dividend income on investments has accrued. Assessee has initiated legal proceedings against the loan creditor and yet to recover the amount. AO has not disputed the fact of filing of complaint and legal proceedings and also there is no real income accrued to the assessee. We are of view that no real income has accrued even though the assessee fallows the mercantile Accounting System. Accordingly, the estimation of interest income is not tenable and the notional income cannot be hypothetical basis for making an addition by the A.O, and we set aside the CIT(A) order on this particular ground of appeal and direct the A.O to delete the addition and allow the ground of appeal of the assessee. Addition u/s 68 - HELD THAT:- CIT(A) on this disputed issue has granted the partial relief based on the evidences filed in the course of the appellate proceedings and remand report. Whereas, in respect of ₹ 50,000/-addition sustained by the CIT(A).Even before us, the assessee could not substantiate with any evidence of the sources.Accordingly, we find, there is no merits in the submissions of the Ld.AR and confirmed the order of the CIT(A) on this disputed issue and dismiss the ground of appeal of the assessee. Disallowance of trading loss treated as speculation loss - AR submitted that the tax authorities have not considered the various facts, which were placed in the hearing proceedings and prayed for an opportunity to substantiate with evidences before lower authorities - HELD THAT:- We find this matter requires verification of facts and accordingly, we restore the disputed issue for limited purpose to the file of the A.O to verify and examine the facts on trading in commodities and allow the ground of appeal for statistical purposes.
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