TMI Blog2015 (6) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'Expenses claimed on account of the Portfolio Management Services (PMS) fees' - Held that:- Respectfully following the decision of the Tribunal in the case of KRA Holding and Trading Pvt. Ltd. (2013 (9) TMI 1013 - ITAT PUNE) we hold that the 'PMS' fees paid by the assessee is an allowable deduction from the capital gains - Decided against revenue. Computation of deduction available to the assessee u/s 80-IA of the Act with respect to the profits and gains of the Windmill Undertaking - adoption of the 'initial assessment year' - Held that:- Similar issue was considered by the Tribunal in the assessee's own case for assessment years 2004-05 to 2006-07 after following the judgement of the Hon'ble Madras High Court in the case of Velayudh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,36,234/- representing Provision for leave encashment, which has been ascertained on the basis of actuarial valuation, which was admittedly different than the one described in section 43B(f) of the Act. 4. The Ld. Representative for the assessee submitted that the aforesaid issue is liable to be decided against the assessee following the decision of the Pune Bench of the Tribunal in the assessee's own case for earlier assessment years. In this context, a reference has been made to the decision of the Tribunal dated 29.05.2009 in the case of the assessee vide ITA No.83 1326/PN/2006 for assessment years 2002-03 2003-04 respectively. It was also contended that in the case of Serum Institute of India Ltd. in ITA No.17/PN/2012 and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the assessee has claimed deduction of Portfolio Management Scheme fees amounting to ₹ 32,49,729/- out of the capital gains derived on sale of shares/securities. On being asked as to why such expenditure should not be disallowed while working out the resultant capital gains, the assessee submitted that the said expenditure having been incurred for managing the investment portfolio of the assessee by experts in the field was nothing but cost associated with buying of good scrips and selling the same at right time and therefore, it constituted cost of investment. However, the Assessing Officer did not find any merit in the contention of the assessee. He observed that as per sec.48, only such expenses are deductible from the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue has observed as under : 9. In the appeal of the assessee, the solitary issue is with regard to the action of the CIT(A) in confirming the stand of the Assessing Officer that fees paid to ENAM Asset Management Company Pvt. Ltd. was not an allowable expenditure in computing appellant's income whether under the head 'business' or under the head 'capital gains'. 10. In this regard, the Assessing Officer noticed that assessee had incurred expenditure of ₹ 2,79,31,009/- representing payments to ENAM Asset Management Company Pvt. Ltd. as portfolio management fees in terms of an Investment Management Agreement dated 01.01.2005. Following his decision for the earlier assessment years i.e. assessment year 2004-05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and also the precedent in the assessee's own case by way of the order of the Tribunal dated 25.07.2012 (supra). In the said case, the Tribunal considered the allowability of expenditure incurred by way of payment of fees of ENAM Asset Management Company Pvt. Ltd. in terms of the investment agreement dated 01.01.2005, which is precisely the issue before us also. The Tribunal referred to its earlier decision in the assessee's own case for assessment year 2004-05 vide order dated 31st May, 2011 (supra) and noticed that the issue has been decided in favour of the assessee. Thereafter, the Tribunal noted that against the decision of the Tribunal dated 31st May, 2011 (supra), Revenue preferred an appeal before the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CIT(A) for earlier year has been reversed by the Tribunal, therefore, unless and until the decision of the Tribunal is reversed by a higher court, the same in our opinion should be followed. In this view of the matter, we respectfully following the order of the Tribunal in assessee's own case for A.Y. 2004-05 allow the claim of the Portfolio Management fees as an allowable expenditure. The ground raised by the assessee is accordingly allowed. 14. Following the aforesaid precedent, which has considered the similar objections of the CIT(A), in our considered opinion, the order of the CIT(A) in the present case is untenable and we accordingly setaside the same and direct the Assessing Officer to delete the impugned addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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