9911796707
TMI Blog2025 (5) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the Petitioner, the impugned order wrongly seeks to tax the entire amount earmarked for fund expenses, which are liable to be reimbursed to the Petitioner at actuals as and when incurred, by deeming the same as consideration towards supply of services by the Petitioner to the fund. 5. The short issue that has been pressed into service by Mr. Ajay Vohra, ld. Senior Counsel appearing for the Petitioner is that the impugned order lacks jurisdiction as there has been a misinterpretation of the Investment Management Agreement dated 19th September, 2017 and similar other agreements. It is the submission of the ld. Senior Counsel that under the said agreement, there is a clear difference between investment management fee, which is charged by the Petitioner as set out under Clause 3 of the Agreement, as against the operational expenses and other expenses, which the Petitioner incurs, which would be charged to the fund which is being managed by the Petitioner under Clause 4. 6. By way of illustration, ld. Senior Counsel for the Petitioner has taken the Court to the tabular example of fee charges and distribution mechanism, which is Annexure K of the present petition i.e., the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of the Capital Contribution returned against such Class B Unit ("Class B Management Fees"). 3.3 Class A Management Fees shall be charged exclusively against the Class A Units and Class B Management Fees shall be charged exclusively against the Class B Units. No Management Fee shall be charged against Class C Units & Class D Units. Subject to the caps provided in Clause 3.2 above, the Investment Manager may agree to charge differential Management Fees in respect Class A Units or Class B Units subscribed to by any Contributor. 3.4 The Management Fee payable to the Investment Manager shall be exclusive of all applicable taxes and levies such as any goods and services tax or value added tax (together with surcharge or cess as may be applicable) leviable on such Management Fee, the same to be borne by Scheme II. The income-tax liability on theManagement Fees or any other income earned by the Investment Manager shall be borne by the Investment Manager and not by the Scheme II. The Investment Manager may agree to charge differential Management Fees in respect Class A Units or Class B Units subscribed to by any Contributor. 3.5 The payment of the Management Fees will commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (or other similar governing body). Provided further, this Clause 3.8 shall not affect any fees or commissions payable to the Investment Manager for any agreement entered into prior to the making of any Portfolio Investment, if the same has been disclosed to the Trustee Company prior to making such Portfolio Investment. In the event any officer, director or employee of the Investment Manager is appointed as a director in any Investee Company (by reason of being an officer, director or employee of the Investment Manager), any commission(s) or like amounts received by such officer, director or employee from any Investee Company (other than sitting fees and reimbursement expenses) shall be promptly refunded to the Scheme II." 4. EXPENSES 4.1. The operational expenses, whether incurred directly by the fund or indirectly by the Investment Manager for and on behalf of the fund, shall be charged to the fund on actual basis. The transaction expenses incurred for engaging services of third parties in evaluating, finalizing and concluding investments may either be capitalzed for investments made or be expensed out as considered appropriate by the Investment Manager 4.2. The Investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 35.00 2 Annual fees / charges (i) Operating Expenses on actual basis 15.00 14.81 0.03 0.17 30.00 (ii) Management fees @ 1.8% / 2% of capital commitments 9.00 9.87 - - 18.87 C Fees and charges year 2 to 7 1 Annual fees / charges (i) Operating Expenses on actual basis 90.00 88.83 0.16 1.00 180.00 (ii) Management fees @ 1.8% / 2% of capital contributions 54.00 59.22 - 113.22 D Total Fees and Charges 1 One time fees / charges (i) Establishment expenses capped @ 3.5% of capital commitments 17.50 17.27 0.03 0.20 35.00 2 Annual fees / charges (i) Operating Expenses on actual basis 105.0 0 103.64 0.19 1.17 210.00 (ii) Management fees (B + C) 63.00 69.09 - - 132.09 3 Total 185.5 0 190.00 0.22 1.37 377.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge or would it be one-time set up fee, etc. There is no consistent stand on behalf of the Petitioner. The question whether any of the expenses incurred either on actuals or as a lumpsum in percentage terms, would have to be construed as Fee or not and whether it has to be taxed or not would require a scrutiny of the records of the Petitioners. The accounts of the Petitioner would need to be gone into to see as to whether the demand is valid or not. The impugned order is clearly an appealable order under Section 107 of the Central Goods and Services Tax Act, 2017. 14. In the opinion of this Court, the interpretation of such agreements which involves a factual analysis are beyond the scope of writ jurisdiction. There is no inherent lack of jurisdiction. Neither is there any violation of principles of natural justice. Under such circumstances there is no ground for interference with the impugned order in writ jurisdiction. 15. The Petitioner is, however, permitted to avail of its appellate remedy in accordance with law. 16. The Petitioner is permitted to file an appeal within a period of 45 days along with pre-deposit, in which case, the appeal shall not be dismissed on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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