YASMIN PHEROZE MODY, MUMBAI V. JCIT CIR 12(2), MUMBAI

ITA 2549/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0912 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 28-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 20-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: DEEPAK TRASHWALA
• Keywords: Cost of acquisition; Capital Gains

Judgement Text

ITA NO.2549/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SMT. ASHA VIJAY RAGHAVAN, (JUDICIAL MEMBER) ITA NO. 2549/MUM./2009 ASSESSMENT YEAR : 2005-06 DATE OF HEARING : 28.7.2010 MRS. YASMIN PHEROZE MODY ...... APPELLA NT C/O S.F. ENGINEER NOSHIWAR MANSION HENRY ROAD, COLABA MUMBAI 400 039 PAN AAHPM4800F VS. JT. COMMISSIONER OF INCOME TAX .. RESPO NDENT AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400 020 APPELLANT BY : SHRI DEEPAK TRASHWALA RESPONDENT BY : SHRI A.K. NAYAK O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF CIT(A)S ORDER DATED 13 TH FEBRUARY 2009, FOR THE ASSESSMENT YEAR 2005-06, ON THE FOLLOWING GROUNDS:- ITA NO.2549/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 2 OF 4 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A)-XII, MUMBAI, ERRED IN DISALLOWING THE AS SET MANAGEMENT FEE OF RS.333,248/- OUT OF CAPITAL GAINS OFFERED TO TAX ON THE GROUND THAT THE DETAILS BREAK UP OF THE ASSET MANAGEMENT FEE ON THE SHARES PURCHASE AND SOLD WERE NOT SUBMITTED AND HENCE IT CANNOT BE HELD THAT THE WHOL E FEE PAID TO THE PMS MANAGER IS ON ACCOUNT OF SHARES ACQUIRED AN D SUBSEQUENTLY SOLD. 2. THE SHORT POINT OF DISPUTE IS WHETHER OR NOT THE FE ES PAID BY THE ASSESSEE TO THE PORTFOLIO MANAGER SHOULD BE TAKEN I NTO ACCOUNT WHILE COMPUTING CAPITAL GAIN ON SALE OF SHARES WHILE THE ASSESSING OFFICER HAS DECLINED THE DEDUCTION IN THE GROUND THAT SUCH A PA YMENT CANNOT BE ALLOWED AS A DEDUCTION U/S 48 AS IT IS ON REVENUE A CCOUNT, THE CIT(A) HAS DECLINED TO INTERFERE IN THE MATTER DUE TO NON-AVAI LABILITY OF COMPLETE DETAILS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE PRAYS FOR AN O PPORTUNITY TO PRODUCE RELEVANT DETAILS SO AS TO ENABLE ADJUDICATI ON NO MERITS, BY THE CIT(A). LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSES THE PRAYER OF THE ASSESSEE AND SUBMITS THAT, BY NO STRETCH OF LOGIC, PAYMENT MADE TO PORTFOLIO MANAGER COULD BE TAKEN INTO ACCOUNT FOR COMPUTING C APITAL GAIN. 4. IN OUR CONSIDERED VIEW, AS LONG AS IT CAN BE ESTABL ISHED THAT THE PAYMENT TO PORTFOLIO MANAGER IS RELATABLE TO SALE O R PURCHASE OF A PARTICULAR SCRIP, THE PAYMENT SO MADE IS TO BE TAKE N INTO ACCOUNT FOR COMPUTING EFFECTIVE COST OF ACQUISITION OR EXPENSE FOR TRANSFER OF SHARES, AS THE CASE MAY BE. HOWEVER, THIS IS ESSENTIALLY A FAC TUAL ASPECT OF THE MATTER AND THE ONUS IS ON THE ASSESSEE TO DEMONSTRATE THE FACTUAL ELEMENTS EMBEDDED IN HIS CONTENTIONS. IN THIS VIEW OF THE MA TTER, AND BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPE R TO REMIT THE MATTER TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF OUR OBSERVATION ITA NO.2549/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 3 OF 4 AS ABOVE AND IN THE LIGHT OF SUCH DETAILS AS THE AS SESSEE MAY BE ABLE TO PRODUCE. WITH THESE DIRECTIONS, THE MATTER STANDS R ESTORED TO THE FILE OF THE ASSESSING OFFICER. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOU NCED IN THE OPEN COURT TODAY ON 30 TH DAY OF JULY, 2010. SD/XX SD/XX (ASHA VIJAY RAGHAVAN) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 30 TH DAY OF JULY, 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX, MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, G BENCH, ITAT, MU MBAI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHWODHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, M UMBAI ITA NO.2549/MUM/2009 ASSESSMENT YEAR : 2005-06 PAGE 4 OF 4 DATE INITIAL 1. DRAFT DICTATED ON 28.7.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29.7.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29.7.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 29.7.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29.7.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 29.7.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER