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2017 (9) TMI 1767 - AT - Income TaxDisallowance of expenses not relating to long term capital gain - assessee also seeks direction to assess the Long term capital gains at concessional rate of tax - assessee is a share trading and investment company - Held that:- As earlier noticed that the assessee has generated income only by way of capital gains out of its investment activities. In that case, the natural corollary is that the services of the directors and employees have been mainly used in connection with the investment activities only. It is also true that the directors and employees would have contributed in connection with the corporate activities related to maintaining corporate structure. It is the view that 25% of salary expenses incurred on directors as well as other staffs can be considered as having been incurred in connection with maintaining corporate structure. Accordingly modify the order passed by CIT(A) on this issue and direct the AO to treat 25% of the salary expenses as revenue expenses incurred in maintaining corporate structure. The assessee has not given details of office expenses of ₹ 3,121/-. Hence, in my view, 50% thereof may be considered as incurred in maintaining corporate structure and allowed. Interest expenditure, demat charges and security transaction charges cannot be considered as expenses relating to maintaining corporate structure. Accordingly confirm the disallowance of the same. The assessee has not explained the nature of Stock exchange expenses and legal expenses. Hence no other option but to confirm their disallowance. Direct the AO to compute the expenses allowable as per the discussions made supra. The next ground urged by the assessee relates to the tax computed by the assessee. A.R submitted that the assessing officer has computed tax on the capital gain arising in off-market transactions at regular rate, whereas they have to be taxed at concessional rate. Set aside this issue to the file of the AO to examine the claim of the assessee. - Appeal of the assessee is partly allowed.
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