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2019 (1) TMI 1065 - AT - Income TaxDisallowance of deduction u/s 48(i) - computation of capital gain - Whether the expenditure incurred of U.S. $ 13,27,609, is wholly and exclusively in relation to the transfer of shares of the Indian subsidiary, hence, allowable as deduction under section 48(i) - Held that:- There cannot be any room for doubt that the expenditures were in relation to the transfer of shares of the India Subsidiary termed as ‘Project Genesis’. As could be seen from the scope of work for which the services were rendered by the legal /professional firm, it is closely and intrinsically related to transfer of shares of the Indian Subsidiary. Therefore, the expenditure incurred is wholly and exclusively in connection with the transfer of shares of the Indian Subsidiary. Hence, qualifies for deduction u/s 48(i). Non–disclosure / non–mention in the name of the ultimate buyer of the shares in no way militates against the fact that the expenditure incurred by the assessee on account of legal and professional fees paid is in connection with transfer of shares. The decision relied upon by the learned Departmental Representative on the other hand, will not be applicable to the facts of the present case, since, it involves allowability of PMS fee which is not the issue in the present appeal. Thus, in view of the aforesaid, we hold that assessee’s claim of deduction of U.S. $ 13,27,609 is allowable under section 48(i). - Decided in favour of assessee.
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