TMI Blog2014 (10) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... The captioned appeal by the assessee is directed against an order of the Commissioner of Income Tax (Appeals)-III, Pune dated 17.10.2013 which, in turn, has arisen from an order dated 15.12.2009 passed by the Assessing Officer u/s 143(3) of the Income-tax Act, 1961 (in short the Act ) pertaining to the assessment year 2007-08. 2. In this appeal, the solitary issue raised by the assessee is against the action of the income-tax authorities in not allowing the deduction of Portfolio Management Services (PMS) fees paid by the assessee of ₹ 2,23,05,158/- while computing income from capital gains. As per the assessee, the PMS fee represents expenditure incurred wholly and exclusively in connection with the purchase and sale of securitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.07.2014. A copy of the said precedent has been placed on record. The learned Departmental Representative appearing for the Revenue has not controverted the aforesaid factual matrix brought out by the learned Representative for the assessee. 5. The Tribunal in the assessee s own case for assessment year 2008-09 (supra) considered an identical issue relating to the deduction of part of PMS fee paid by the assessee while computing capital gains. The following discussion in the order of the Tribunal is relevant :- 6. The issue before us is with regard to deduction of part of Portfolio Manager s (PMS) fee paid by the assessee while computing capital gain. We find that ITAT Pune A Bench in the case of ARA Holding Trading Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bha vs. ITO was brought to our notice by the learned DR wherein it was held that Portfolio Management Scheme fees is not deductible against capital gains. The decision of the Pune Bench of the Tribunal in the case of KRA Holding Trading was not followed by the Mumbai Bench in the above cited decision. The Mumbai Bench following other decisions of the coordinate Benches of the Tribunal declined to follow the decision in the case of KRA Holding Trading (supra). It is the settled proposition of law that when two view are possible on the same issue the view which is favourable to the assessee has to be followed. [CIT vs. Vegetable Products 88 ITR 192 (SC)]. Further, in the instant case the Tribunal in assessee s own case has already taken a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.3482 of 2010 dated 19-07-2011 reads as under: Heard. Admit on the following question of law:- Whether on the facts and circumstances of the case, the ITAT was justified in holding that the income earned by the assessee by the portfolio management scheme was liable to be assessed under the head capital gains instead of being assessed under the head profit gains of business or profession ? Nothing was filed before us to substantiate that the Revenue has gone on appeal against the order of the Tribunal allowing the claim of Portfolio Management fees as an expenditure from such capital gains. 11. The decision of Mumbai Bench of the Tribunal in the case of Homi K. Bhabha Vs. ITO was brought to our notice by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing similar, so following the same reasoning, we do not agree with the findings of CIT(A) on the issue. In view of above, we hold that Portfolio Management Fees is allowable expenditure as held in KRA Holdings Trading Pvt. Ltd. (supra). The Assessing Officer is directed to allow the same as claimed by the assessee. 7. In the result, appeal filed by the assessee is allowed. 6. Following the aforesaid precedent in the assessee s own case for assessment year 2008-09, which has been rendered under identical set of facts, we set-aside the order of the CIT(A) and direct the Assessing Officer to allow the claim of the assessee accordingly. 7. In the result, the appeal of the assessee is allowed, as above. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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