TMI Blog2005 (7) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... e has waived fees receivable under GIC Big Value Scheme. The assessee was required to explain why the fees receivable should not be added to the income of the assessee. It was explained that only real income, i.e., income accrued and received can be brought to tax and notional income cannot be charged to tax. It was further stated that the assessee has taken conscious view that the management fee receivable by the assessee from the mutual fund will be a beneficiery as the overall result of fee charge and expenses to be borne by the assessee-company were almost equal. It was also explained that NAV (Net Asset Value) of the scheme had fallen below the assured repurchase price and also charging of fees would have resulted in correspondingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue can be decided independently also. It was further submitted by the DR that the CIT(A) has not given a correct finding as, as per the agreement, the fee was payable by the Mutual Fund. Therefore, the waiver of fees at the hands of the assessee should not be taken into consideration and the income should be assessed on the accrual basis and the same has been accrued during the year under consideration. Therefore, the order of the Assessing Officer should be restored on this issue. On the other hand, the ld. AR of the assessee placed reliance on the order of the CIT(A). It was further submitted that the fee was chargeable under one of the schemes and the scheme was as per the objects of the assessee-company. It was further subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was incharge of management scheme performance which lagged behind the promise. It was also explained that net asset value of scheme had fallen below the repurchase price. It was also submitted that charging any fees would have resulted in correspondingly larger shortfall which eventually would have been to be made good for GIC Asset Management Committee Ltd. In the light of the above facts the Board of Directors thought it prudent not to charge fee. The resolution as discussed above was passed by the Board of Directors on 20th January, 1997. A certificate was filed before the Assessing Officer. This is not a case that the assessee has waived fees after close of the year. This decision was on commercial expediency and was not an after-tho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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