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2011 (9) TMI 39 - HC - Income TaxAddition - Advisory fees - SEBI Regulation provides for the maximum limit on the investment advisory fees that could be claimed, it cannot be said that the Asset Management Companies are liable to be assessed at the maximum limit prescribed under the SEBI Regulations, irrespective of the amount actually recovered by the Asset Management Companies - Therefore, the decision of the ITAT in deleting the additions made by the Assessing Officer on notional basis namely, the difference between the amount claimed and recovered by the Assessee and the maximum ceiling prescribed under the SEBI Regulation cannot be faulted - Decided in favour of assessee. Marketing expenses - the Assessee could have collected the entire amount of expenses from the Mutual Fund as per Regulation 52(6) of the SEBI Regulation cannot be a ground to make addition in the hands of the Assessee, especially when the bonafide decision of the Assessee to claim part of the expenses from the Mutual Funds is not doubted and the expenditure claimed to have been incurred by the Assessee is also not doubted - Decided in favour of assessee. Recurring expenditure - Genuineness of the expenditure incurred by the Assessee on behalf of the Mutual Funds is not in dispute - If the assessee, an Asset Management Company, due to business exigencies claims and recovers from the Mutual Funds lesser amount than the amount of expenditure actually incurred during the course of its business, then, unless it is established that there were no business exigencies or the claim was not genuine, the expenditure incurred cannot be disallowed and added to the income of the Assessee - Decided favour of assessee.
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