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2017 (7) TMI 306 - AT - Income TaxDisallowance of Commission paid to Direct Selling Agents (DSA) - Held that:- With regard to the objection of the ld AO that assessee changing the fee structure at its discretion does not imply that the DSAs will not get their due fees for the work done by them. They would receive their due fees as per the changed / revised fee structure by the assessee. Thus expenditure crystallized during the year even in this scenario. The aforesaid clauses together with the other clauses in the agreement with DSA provides adequate checks and balances to protect the interests of the commission payment made by MFL (assessee herein) to DSAs. Thus the liability of expenses on account of DSA commission / brokerage amounting to ₹ 150,62,00,000/- had accrued to the assessee on disbursal of total loan facilities amounting to ₹ 708662.96 lakhs during the relevant asst year which was discharged by it during the year itself. Hence the liability to pay the commission / brokerage to DSAs had duly crystallized and hence the comments of the ld AO in this regard that it had not crystallized does not hold water. upfront claim of expenses - Held that:- Upfront expenditure should be allowed in the year of incurrence on accrual basis Treatment of portfolio acquisition cost - revenue or capital - Held that:- We hold that these portfolio cases are to be treated as stock in trade for NBFCs and the expenses incurred for purchasing these portfolios would be revenue in nature. We draw support in this regard from the ratio laid down by the Hon’ble Delhi High Court in the case of CIT vs Goyal M.G.Gases P. Ltd reported in (2008 (4) TMI 465 - DELHI HIGH COURT )
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