Sudha Narayana Murthy , Bangalore V. Deputy Commissioner of Income Tax Circle-7(2)(1), Bangalore

ITA 1413/BANG/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9846 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWAL BENGALURU
• Assessee Lawyers: H N KHINCHA
• Keywords: Proportionate interest; Capital Gains
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI A K GARODIA , ACCOUNTANT MEMBER IT A NO. 1413/BANG/2017 ASSESSMENT YEAR: 2011 - 12 SMT. SUDHA NARAYANAMURTHY, # 575, AMOGHVARSH, 21 ST MAIN, 35 TH CROSS, 4 TH T BLOCK, JAYANAGAR, BANGALORE 560 041. PAN: ADQPM 7361R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(2)(1[FORMERLY 4(1)], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI H.N. KHINCHA, CA RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL, ADDL. CIT(DR)(ITAT) BENGALURU. DATE OF HEARING : 18 .12 .2019 DATE OF PRONOUNCEMENT : . 0 1 .20 20 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 28.04.2017 OF THE CITA RELATING TO ASSESSMENT YEAR 2011-12. ITA NO. 1413/BANG/2017 PAGE 2 OF 13 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN A LLOCATING PORTFOLIO MANAGEMENT SERVICES (PMS) CHARGES WHILE COMPUTING I NCOME UNDER THE HEAD SHORT TERM CAPITAL GAIN (STCG) WHICH SUFFERS T AX @ 15% AT RS.37,71,050 AS AGAINST THE CLAIM OF ASSESSEE THAT THE DEDUCTION ON ACCOUNT OF PMS CHARGES WHILE COMPUTING INCOME UNDER THE HEAD STCG SHOULD BE ONLY RS.6,63,040. 3. THE ASSESSEE IS AN INDIVIDUAL. FOR THE AY 2011- 12, THE ASSESSEE FILED RETURN OF INCOME ON 27.7.2011 DECLARING AN IN COME OF RS.24,60,50,090 COMPRISING OF FOLLOWING:- INCOME FROM HOUSE PROPERTY 84,000 INCOME FROM SHORT TERM CAPITAL GAIN 10,09,23,408 INCOME FROM OTHER SOURCES 14,50,42,677 ------------------ 24,60,50,085 ------------------ 4. THE ASSESSEE HAD PAID PORTFOLIO MANAGEMENT SERVI CES (PMS CHARGES) TO PORTFOLIO MANAGERS FOR RENDERING SERVIC ES IN RELATION TO INVESTMENTS ADVISE WHICH RESULTED IN THE ASSESSEE E ARNING INCOME IN THE FORM OF INTEREST WHICH IS CHARGEABLE TO TAX UNDER T HE HEAD INCOME FROM OTHER SOURCES AND ALSO DIVIDEND WHICH IS EXEMPT BE SIDES INCOME IN THE FORM OF SHORT TERM CAPITAL GAIN (STCG). THE INCOM E EARNED FROM STCG IS CHARGEABLE TO TAX AT 15% WHEREAS INCOME IN THE FORM OF INTEREST IS CHARGEABLE TO TAX AT 30%. THE ASSESSEE PAID PMS CHA RGES OF RS.72,94,053/-. THE PMS CHARGES HAD BEEN PAID BY TH E ASSESSEE TO TWO PORTFOLIO MANAGERS VIZ., HDFC REAL ESTATE PMS AND M ORGAN STANLEY PMS. THE PAYMENT MADE TO HDFC REAL ESTATE PMS WAS A SUM OF RS.50,20,034 AND TO MORGAN STANLEY PMS WAS A SUM OF RS. 22,74,01 8 RESPECTIVELY. IN ITA NO. 1413/BANG/2017 PAGE 3 OF 13 THE COMPUTATION OF TOTAL INCOME THE ASSESSEE HAD CL AIMED DEDUCTION OF PMS CHARGES AGAINST INCOME IN THE FORM OF STCG WHIC H IS CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS AND WHICH SUFFER S TAX AT 15% OF RS.8,14,961/- (RS.42,550/- TOWARDS PMS CHARGES PAID TO HDFC REAL ESTATE PMS AND RS.7,72,411/- TOWARDS MORGAN STANLEY PMS). A SUM OF RS.33,52,541/- WAS CLAIMED AS DEDUCTION TOWARDS PMS CHARGES AGAINST INCOME IN THE FORM OF INTEREST WHICH WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH IS CHARGEABLE TO TAX AT 30%. THERE IS NO DISPUTE THAT OUT OF THE TOTAL PMS CHARGES PAID BY T HE ASSESSEE OF RS.72,94,053, A SUM OF RS.31,26,551/- ( RS.72,94,05 3 RS.8,14,961 + RS.33,52,541) IS WITH REFERENCE TO DIVIDEND INCOME EARNED BY THE ASSESSEE WHICH IS TAX EXEMPT AND WAS NOT CLAIMED AS DEDUCTION BY THE ASSESSEE IN THE COMPUTATION OF TOTAL INCOME. 5. ACCORDING TO THE AO THE AFORESAID BIFURCATION O F PMS CHARGES AT RS.8,14,961/- TOWARDS INCOME IN THE FORM OF STCG AN D RS.33,52,541/- TOWARDS INTEREST INCOME WAS NOT PROPERLY EXPLAINED BY THE AO. HE THEREFORE ALLOCATED PMS CHARGES OF RS.41,67,502/- O N THE BASIS OF INCOME UNDER THE HEAD CAPITAL GAIN (RS.10,17,38,369) AND INTEREST INCOME (RS.1,06,86,059) WHICH WAS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH RESULTED IN THE PMS CHARGES BE ING APPORTIONED AT RS.6,63,040/- AGAINST STCG AND RS.37,71,050/- AGAIN ST INCOME UNDER THE HEAD INTEREST INCOME WHICH WAS CHARGEABLE TO TAX UN DER THE HEAD INCOME FROM OTHER SOURCES. THE FOLLOWING WERE THE RELEVA NT OBSERVATIONS OF THE AO IN MAKING THE AFORESAID APPORTIONMENT OF PMS CHA RGES:- ON GOING THROUGH THE COMPUTATION OF INCO ME, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED PMS ON INTEREST REFERABLE TO STCG AND PMS ON INTEREST INCOME SEPARATELY. THE TOTAL PMS INTEREST PAID W AS RS.41,67.502/- AGAINST A TOTAL INCOME OF RS.11,24,24,128/-. THE ASSESSEE ITA NO. 1413/BANG/2017 PAGE 4 OF 13 HAS CLAIMED PMS MANAGEMENT FEE AGAINST STCG AT RS .663040/- WHICH SUFFER TAX AT 15%. WHEREAS THE ASSESSEE H AS CLAIMED PMS MANAGEMENT FEE PAID OF RS.33,52,541/-_AGAIN ST INTEREST INCOME OF RS.10686059/-, THIS INCOME SUFFERS TAX AT THIRTY PERCENT. 6. DURING THE COURSE OF HEARING THE ASSE SSEE'S AR WAS UNABLE TO BIFURCATE EXACT INTEREST REFERABL E TO STCG AND INTEREST REFERABLE TO INTEREST RECEIVED. IN VIEW OF THE ABOV E IT IS HELD THAT, IT IS NECESSARY TO ALLOW PROPORTIONATE INTEREST ON BOT H INCOME FROM CAPITAL GAINS AND ON INTEREST INCOME. ACCORDI NGLY, THE PROPORTIONATE INTEREST HAS BEEN ALLOWED AS UNDER: STCG (STT SUFFERED) RS.10,10,75,329/- STCG (NON STT SUFFERED) RS. 6,63,040/- RS.10,17,38,069/- LESS: INTEREST APPORTIONED RS. 37,71,050/- RS. 9,79,67,019/- INTEREST RECEIVED RS. 1,06,86,059/- LESS: PMS INTEREST APPORTIONED RS. 3,96,452/- RS. 1,02,89,607/- 7. THE ABOVE BIFURCATION OF PMS CHARGES DID NOT RE SULT IN ANY CHANGE IN THE TOTAL INCOME, BUT CONSEQUENT TO APPORTIONMEN T OF PMS CHARGES AS ABOVE, THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES STOOD ENHANCED AND THE INCOME UNDER THE HEAD CAPITAL GA IN STOOD REDUCED. CONSEQUENTLY THE TAX PAYABLE ON THE INCOME RETURNED BECAME MORE BECAUSE STCG WAS CHARGEABLE TO TAX AT A LOWER RATE WHEREAS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES WAS CHAR GEABLE TO TAX AT A HIGHER RATE. THE ASSESSEE WAS THEREFORE AGGRIEVED B Y THE AFORESAID METHOD OF APPORTIONMENT OF PMS CHARGES AND HE FILED APPEAL BEFORE CIT(A). ITA NO. 1413/BANG/2017 PAGE 5 OF 13 8. AGGRIEVED BY THE ACTION OF THE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). THE ASSESSEE SUBMITTED THE BASIS OF ALLOCATION OF PMS CHARGES AS DONE BY THE ASSESSEE IN THE COMPUTATION OF INCOME BY SUBMITTING THAT THE ASSESSEE HAD USED THE SERVICES OF TWO PORTFOLIO MANAGERS VIZ., (1) HDFC REAL ESTATE PORTFOLIO AND ( 2) MORGAN STANLEY PMS. 9. AS FAR AS HDFC REAL ESTATE PORTFOLIO PMS IS CON CERNED, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ONE PMS ACCOUNT WAS WITH HDFC NAMED HDFC REAL ESTATE PORTFOLIO - 1, WITH ACC OUNT NO. 204986. THE ASSESSEE FILED A COPY OF COVERING LETTER DATE D 18.12.2010 OF THE PMS PROVIDER TO SHOW THE WAY, THE PERFORMANCE FEES WAS BEING CHARGED BY THE AFORESAID PMS PROVIDER. THE AUDITED FINANCIALS OF THIS PMS WAS ALSO FILED CONSISTING OF PROFIT AND LOSS ACCOUNT, BALANC E SHEET, CAPITAL REGISTER AND BANK BOOK FOR THE YEAR ENDING 31-3-2011 . THE A UDITED PROFIT AND LOSS ACCOUNT SHOWED A GROSS INCOME OF RS. 1,60,01,119 /- WHICH IS THE FIGURE SHOWN IN THE 3 RD COLUMN OF THE CHART UNDER THE HEAD HDFC REAL ESTAT E PMS PROVIDER. THE CAPITAL REGISTER SHOWED THE 4 QU ARTERLY MANAGEMENT EXPENDITURE DEBITED AS UNDER:- MANAGEMENT FEES QE JUNE 2010 13,47,472-84 MANAGEMENT FEES QE SEPTEMBER 2010 12,12,296-39 MANAGEMENT FEES QE DECEMBER 2010 12,74,285-00 MANAGEMENT FEES QE MARCH 2011 11,85,980-00 ----------------- 50,20,034-23 ITA NO. 1413/BANG/2017 PAGE 6 OF 13 10. THE AFORESAID PMS FEES WAS DIVIDED PROPORTIONAT ELY BASED ON THE INCOME EARNED VIZ., RS. 1,35,627 IN THE FORM OF TAX ABLE STCG, RS.51,79,426 IN THE FORM OF DIVIDEND WHICH IS EXEMP T AND RS.1,06,86,059 WHICH IS INTEREST EARNED ON DEBENTURES WHICH IS CHA RGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. THUS THE PMS FEES WAS APPORTIONED AT RS.42,550/- TOWARDS EARNING OF STCG (TAXABLE) RS.16 ,24,943/- TOWARDS EARNING OF EXEMPT DIVIDEND INCOME AND RS.33,52,541/ - TOWARDS EARNING OF DEBENTURE INTEREST INCOME CHARGEABLE TO TAX UNDER T HE HEAD INCOME FROM OTHER SOURCES. 11. AS FAR AS APPORTIONMENT OF PMS FEES PAID TO MO RGAN STANLEY PMS IS CONCERNED, THE ASSESSEE EXPLAINED THAT THERE WERE 3 PMS SCHEMES NAMELY EMPOWER, PLATINUM AND CAPITAL. IN RESPEC T OF PLATINUM AND CAPITAL THE APPELLANT HAS NOT CLAIMED ANY EX PENDITURE AS THE ENTIRE INCOME FROM THESE TWO SCHEMES WAS EXEMPT INCOM E BEING DIVIDEND. A STATEMENT OF MORGAN STANLEY IN RESPECT OF MORGAN STANLEY EMPOWER WAS FILED WHICH SHOWED CAPITAL LOSS OF RS.41,19,590/- A ND OTHER INCOME RS.3,21,607/- (DIVIDEND RS.1,46,166/- PLUS BANK INTEREST RS.1,75,441/-). THE STATEMENT SHOWS MANAGEMENT EXPENSES OF RS.9,4 5,953/-. HOWEVER, AS BOOKS THE ASSESSEE HAD SHOWN ONLY RS.9,18,57 7/- AS EXPENDITURE WHICH IS DIVIDEND PROPORTIONATE TO INCOME EARNED. 12. THE FOLLOWING CHART WAS FILED BEFORE CIT(A) TO EXPLAIN THE BASIS OF APPORTIONMENT OF PMS CHARGES AS DONE BY THE ASSESSE E IN THE COMPUTATION OF TOTAL INCOME:- ITA NO. 1413/BANG/2017 PAGE 7 OF 13 NATURE OF INCOME OWN ACCOUNT HDFC PMS HDFC REP (REAL ESTATE PMS) MORGAN STANLEY EMPOWER MORGAN STANLEY PLATINUM MORGAN STANLEY CAPITAL INCOME FROM CAPITAL GAINS SHORT-TERM CAPITAL GAINS STT SUFFERED (-) 88,93,205 11,40,88,161 - -41,19,567 - - SHORT-TERM CAPITAL GAINS NON - STT 4,34,110 93,303 1,35,625 - - - LONG-TERM CAPITAL GAINS STT SUFFERED 9,04,39,346 2,73,28,590 - - - - LONG-TERM CAPITAL GAINS NON - STT (-) 20,23,042 18,48,087 - - - - INCOME FROM OTHER SOURCES DIVIDEND 56,28,23,134 1,18,14,892 51,79,426 1,46,166 17,94,078 4,06,100 BANK INTEREST - - 1,75,441 5,26,325 1,75,441 DEBENTURE INTEREST INCOME - 1,06,86,059 - - - TOTAL INCOME 64,27,80,282 15,51,73,034 1,60,01,112 -37,97,960 23,20,403 5,81,541 PMS FEE PAID - - 50,20,034 9,18,577 4,16,950 9,38,491 ALLOCATION MADE BY THE APPELLANT STCG - 42500 7,7 2,411 - INTEREST - 33,52,541 - - ITA NO. 1413/BANG/2017 PAGE 8 OF 13 13. THE CIT(A) HOWEVER CONFIRMED THE ACTION OF THE AO FOR THE FOLLOWING REASON: 5.1 THE APPELLANT HAS NOT BROUGHT ANY DOC UMENTARY EVIDENCE TO SUBSTANTIATE THE BASIS OF ALLO CATION OF PMS FEE TO SELECTIVE PMS, PROVIDERS. THE ALLOCATION OF EXPENSES SHOULD HAVE BEEN DONE ON THE TOTAL INCOME EARNE D THROUGH PMS UNDER THE HEAD STCG AND INTEREST INCOME. THE VERY TERM 'ALLOCATION' IMPLIES THAT THERE IS NO OV ERLY PRECISE METHOD AVAILABLE FOR CHARGING A COST TO A OBJE CT, SO THE ALLOCATING ENTITY IS USING AN APPROXIMATE METH OD FOR DOING SO. THUS, ALLOCATION OF EXPENSES HAS TO BE DONE E ITHER TO SPREAD THE COST IN THE FAIREST WAY POSSIBLE, OR TO DO SO IN A WAY THAT IMPACTS ALL THE INCOME ON UNIFORM BASIS. THE BASIS FOR ALLOCATING EXPENSES SHOULD BE REASONABLE, THERE SHOULD BE A CLEAR RELATIONSHIP BETWEEN THE INCOME, THE ACTIVITIES IT RELATES TO, AND THE BASIS OF ALLOCATION. IN THE INSTAN T CASE, THE PMS PROVIDERS HAVE NOT ALLOCATED ANY EXPENSES TO ANY S PECIFIC INCOME/LOSS AND THE APPELLANT HAS ADOPTED A METHOD WHICH IS NOT MAINTAINABLE. 5.2. IN VIEW OF THE ABOVE DISCUSSION, I FIND N O INFIRMITY IN THE ORDER OF AO IN ALLOCATING THE EXPENSES IN PROPO RTION OF TOTAL INCOME UNDER DIFFERENT HEADS AND CHARGING OF TAX AS PER THE SEPARATE RATE OF TAXES APPLICABLE. 14. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASS ESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 15. THE LD. COUNSEL FOR THE ASSESSEE FILED THE CHAR T WHICH IS GIVEN AS ANNEXURE-I TO THIS ORDER AND SUBMITTED THAT ASSESSEE HAS PAID PMS CHARGES TO TWO DIFFERENT ENTITIES VIZ., HDFC REAL E STATE PORTFOLIO FUND AND MORGAN STANLEY PMS . THE INCOME EARNED FROM EACH OF THE PMS SERVICE PROVIDERS HAVE BEEN IDENTIFIED AND THE PMS CHARGES HAVE BEEN APPORTIONED ON THE BASIS OF INCOME EARNED FROM DIVI DEND, INTEREST ON DEBENTURES AND SHORT TERM CAPITAL GAIN. THE LD. CO UNSEL FOR THE ASSESSEE ITA NO. 1413/BANG/2017 PAGE 9 OF 13 SUBMITTED THAT THE REVENUE AUTHORITIES HAVE MADE TH E ALLOCATION OF PMS CHARGES WITHOUT RECOGNISING THE INCOME EARNED FROM SERVICE PROVIDED BY THE PORTFOLIO MANAGERS. ACCORDING TO HIM, THE APPO RTIONMENT MADE BY THE ASSESSEE IS CORRECT AND IS BASED ON THE INCOME EARN ED IN THE FORM OF DIVIDEND, INTEREST INCOME ON DEBENTURES AND STCG AN D THIS BASIS OF APPORTIONMENT IS CORRECT. 16. THE LD. DR BESIDES RELYING ON THE ORDER OF THE CIT(A) FURTHER SUBMITTED THAT THE ALLOCATION SHOULD BE BASED ON TH E SERVICES PROVIDED BY THE PMS PROVIDER AND NOT ON THE BASIS OF INCOME. T HIS ARGUMENT OF THE LD. DR, HOWEVER, IS NOT SUSTAINABLE BECAUSE THAT WAS NO T THE BASIS OF APPORTIONMENT EITHER BY THE AO OR THE CIT(APPEALS) AND THE REVENUE AUTHORITIES HAVE PROCEEDED TO APPORTION THE PMS CHA RGES ONLY ON THE BASIS OF INCOME EARNED. THE LD. DR THEREFORE CANNOT SET UP A NEW CASE BEFORE THE TRIBUNAL ON THE BASIS OF ALLOCATION OF PMS CHAR GES. 17. AS FAR AS THE MERITS OF THE CLAIM MADE BY THE A SSESSEE IS CONCERNED, WE FIND FROM THE CHART GIVEN AS ANNEXURE TO THIS OR DER THAT THE PMS CHARGES ARE APPORTIONED ON THE BASIS OF THE INCOME EARNED ON THE BASIS OF SERVICES PROVIDED BY THE PMS PROVIDER. THE BASIS O F APPORTIONING PMS CHARGES ON THE BASIS OF INCOME EARNED ON THE BASIS OF SERVICE PROVIDED BY THE PMS PROVIDER HAS BEEN ACCEPTED BY THE AO AS WEL L AS THE CIT(A). THE REASON WHY THERE IS DIFFERENCE IN APPORTIONMENT BET WEEN THE ASSESSEE AND THE REVENUE IS BECAUSE OF INCLUSION OF STCG EARNED BY THE ASSESSEE ON HIS OWN WITHOUT THE SERVICES OF THE PMS PROVIDER HA S ALSO BEEN INCLUDED BY THE REVENUE IN THE INCOME GENERATED THROUGH THE SER VICES OF PMS PROVIDERS. THE CHART ANNEXED TO THIS ORDER AS ANNE XURE-II WILL SHOW THAT THE STCG EARNED BY THE ASSESSEE OF RS.10,17,38,369 COMPRISES OF STCG EARNED BY THE ASSESSEE ON HER OWN WITHOUT THE SERVI CES OF PMS PROVIDER AS WELL AS THROUGH SERVICES PROVIDED BY THE PMS PRO VIDER. THE STCG ITA NO. 1413/BANG/2017 PAGE 10 OF 13 EARNED BY THE ASSESSEE THROUGH THE SERVICES OF THE TWO PMS PROVIDERS IS REFLECTED IN THE CHART GIVEN AS ANNEXURE-II TO THIS ORDER . THEREFORE, THE APPORTIONMENT OF PMS CHARGES PAID BY THE ASSESSEE O F RS.41,67,502/- HAS TO BE APPORTIONED ONLY ON THE BASIS OF INCOME EARNE D THROUGH THE RESPECTIVE PMS PROVIDERS TO THE TOTAL PMS CHARGES. THIS BASIS OF APPORTIONMENT AS GIVEN IN THE CHART GIVEN AS ANNEXU RE-I TO THIS ORDER, IN OUR VIEW APPEARS TO BE CORRECT. THIS CHART WAS HOWEVER NOT FILED BEFORE THE REVENUE AUTHORITIES BUT CHART GIVEN AS ANNEXURE-II TO THIS ORDER WAS FILED BEFORE THE CIT(A) AND THERE IS NO DIFFERENCE IN THE CHART GIVEN AS ANNEXURE- I AND II IN PRINCIPLE EXCEPT THE MANNER OF PRESENTA TION. IN OUR VIEW, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESS EE HAS NOT BROUGHT ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE BASIS OF A LLOCATION OF PMS FEE TO SELECTIVE PMS PROVIDERS. THE DOCUMENTS IN THE FORM OF STATEMENT OF THE PMS PROVIDERS VIZ., HDFC ASSET MANAGEMENT COMPANY L TD. (AT PAGES 46 TO 56) AND THAT OF MORGAN STANLEY AMC (EMPOWER FUND ) (AT PAGE-57 OF PAPER BOOK) CLEARLY SHOW THE INCOME EARNED FROM THE TWO PMS PROVIDERS. THE CIT(A) ACCEPTS THAT ALLOCATION OF EXPENSES SHOU LD HAVE BEEN DONE ON THE TOTAL INCOME THROUGH EARNED THROUGH PMS UNDER T HE HEAD STCG AND INTEREST INCOME. HE HAS HOWEVER OVERLOOKED THAT TH IS IS THE BASIS OF ALLOCATION BY THE ASSESSEE. ON THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, WE ARE SATISFIED THAT THE BASIS OF ALLOCATION OF PMS CHARGES AS DONE BY THE ASSESSEE IS CORRECT AND DESERVES TO BE ACCEP TED. WE THEREFORE DIRECT THAT THE ALLOCATION OF PMS CHARGES AS DONE B Y THE ASSESSEE BE ACCEPTED. 18. CONSEQUENTLY, THE APPEAL BY THE ASSESSEE IS ALL OWED. ITA NO. 1413/BANG/2017 PAGE 11 OF 13 19. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF JANUARY, 2020. SD/- SD/- ( A K GARODIA ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VIC E PRESIDENT BANGALORE, DATED, THE 3 RD JANUARY, 2020. ENCL: ANNEXURE I & II / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(E) 5. DR, ITAT, BANGALORE. 6. GUARD FIL E BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE. ITA NO. 1413/BANG/2017 PAGE 12 OF 13 ANNEXURE-I TO ORDER ITA NO. 1413/BANG/2017 PAGE 13 OF 13 ANNEXURE-II TO THE ORDER