YASMIN PHEROZE MODY, MUMBAI V. ADDL CIT 12(2), MUMBAI

ITA 7216/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0888 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 23-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2013
• Court: TRIBUNAL
• Department Lawyers: RAKESH KUMAR AGARWAL
• Keywords: Cost of acquisition; Futures and options
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 7216/M/2013 (AY:2007 - 2008 ) MRS. YASMIN PHEROZE MODY, C/O. S.F. ENGINEER, NOSHIRWAN MANSION, HENRY ROAD, COLABA, MUMBAI - 039. / VS. ADDL. CIT, 12(2), MUMBAI - 400 020. ./ PAN : AAHPM4800F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DEEPAK TRALSHAWALA / RESPONDENT BY : SHRI RAKESH KUMAR AGARWAL / DATE OF HEARING : 23.07.2015 / DATE OF PRONOUNCEMENT : 31.7 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 10.12.2013 IS AGAINST THE ORDER OF THE CIT (A) - 10, MUMBAI DATED 13.8.2013 FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING SUMMARIZED GROUND WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD CIT (A) - X, MUMBAI HAS ERRED IN DISALLOWING THE ASSET MANAGEMENT FEES OF RS. 30,83,907/ - CLAIMED AS DEDUCTION OUT OF CAPITAL GAINS OFFERED TO TAX ON THE GROUND THAT THE EXPENDITURE CANNOT BE SAID TO BE WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION W ITH THE TRANSFER OF ASSETS DESPITE THE FACT THAT THE APPELLANT HAD PAID THE SAID FEES AS FEES BASED ON PROFIT, FEES BASED ON NAV OF THE FUND AND UPFRONT FEES IN RESPECT OF SHARES PURCHASE AND SOLD ON WHICH CAPITAL GAIN HAS BEEN OFFERED FOR TAXATION. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN FUTURES AND OPTIONS, AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 3,08,22,844/ - . ASSESSMENT WAS COMPLETED U /S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DE TERMINED AT RS. 3,39,11,350/ - WHICH INCLUDE THE DISALLOWANCE OF RS. 30,83,907/ - CLAIMED ON ACCOUNT OF ASSET MANAGEMENT FEE. AGGRIEVED, ASSESSEE CARRIED THE MATTE IN APPEAL BEFORE THE FIRST APPELLATE AUTHO RITY. 2 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) DISMISSED THE APPEAL. AGAIN AGGRIEVED WITH THE DECISION OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RA ISING THE ABOVE MENTIONED GROUND. 4. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR AYS 2005 - 06 AND 2006 - 07 VIDE ITA NO. 2549/M/2009 AND ITA NO.6596/M/20 09 RESPECTIVELY AND SUBMITTED THAT SIMILAR ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE AFORESAID ASSESSMENT YEARS AND THE MATTERS WERE REMANDED FOR FRESH CONSIDERATION TO THE FILE OF THE AO AFTER GRANTING A REASONABLE OPPORTUNITY TO THE ASSES SEE AND THE CONTENTS OF PARA 4 OF THE SAID ORDERS OF THE TRIBUNAL (SUPRA) IS RELEVANT IN THIS REGARD. LD COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT CONSIDERING THE EARLIER ORDERS OF THE ITAT IN ASSESSEES OWN CASE (SUPRA), THE INSTANT APPEAL MAY ALSO BE REMANDED FOR FRESH ADJUDICATION OF THE ISSUE. 5. AFTER HEARING BOTH THE PARTIES, WE FIND THE GROUND RAISED BY THE ASSESSEE IN THE APPEAL IS SIMILAR TO THAT OF THE ONE ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AYS 2005 - 06 AND 2006 - 07 (S UPRA). IN THIS REGARD, WE FIND , PARA 4 IN ITA NO.2549/M/2009 (SUPRA) IS RELEVANT AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER THE SAME IS EXTRACTED AS FOLLOWS: 4. IN OUR CONSIDERED VIEW, AS LONG AS IT CAN BE ESTABLISHED THAT THE PAYMENT TO PORTFOLIO M ANAGER IS RELATABLE TO SALE OR PURCHASE OF A PARTICULAR SCRIP, THE PAYMENT SO MADE IS TO BE TAKEN INTO ACCOUNT FOR COMPUTING EFFECTIVE COST OF ACQUISITION OR EXPENSE FOR TRANSFER OF SHARES, AS THE CASE MAY BE. HOWEVER, THIS IS ESSENTIALLY A FACTUAL 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 MATTER, AND BEARING IN MIND ENTIRELY OF THE CASE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE ASSESSING OFFICER FO R FRESH ADJUDICATION IN THE LIGHT OF OUR OBSERVATION AS ABOVE AND IN THE LIGHT OF SUCH DETAILS AS THE ASSESSEE MAY BE ABLE TO PRODUCE. WITH THESE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 6. CONSIDERING THE ABOVE DECISI ON OF THE ITAT AS WELL AS FOR THE SAKE OF CONSISTENCY, WE REMAND THIS GROUND TO THE FILE OF THE AO WITH IDENTICAL DIRECTIONS GIVEN BY THE TRIBUNAL VIDE PARA 4 ABOVE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3 ORDER PRONOUNCED IN TH E OPEN COURT ON 31 ST JULY, 2015. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31.7 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI