RDA Holding & Trading Pvt. Ltd., Pune V. Addl. CIT, Range-6, Pune

ITA 825/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80037 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: R D ONKAR
• Keywords: Capital asset; Business income; Question of law; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.825/PN/2013 (A.Y: 2008-09) RDA HOLDING & TRADING PVT. LTD., 12, BOAT CLUB ROAD, RIVERSIDE ESTATE, PUNE 411037 PAN: AAACR9831K APPELLANT VS. ADDL. CIT, RANGE 6, PUNE RESPONDENT APPELLANT BY : SHRI R.D. ON KAR RESPONDENT BY : SHRI B.C. MALAKAR DATE OF HEARING: 21.07.2014 DATE OF ORDER : 30.07.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-III, PUNE, D ATED 31.01.2012 FOR A.Y. 2008-09 ON THE FOLLOWING GROUND S. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALLOWA NCE OF PORTFOLIO MANAGEMENT SERVICES (PMS) FEES PAID BY TH E APPELLANT RS.5,77,03,093/- AND CLAIMED AS DEDUCTION FROM THE CAPITAL GAINS BEING EXPENSES INCURRED WHOL LY AND EXCLUSIVELY IN CONNECTION WITH THE PURCHASE AND SALE OF SECURITIES MANAGED UNDER THE PORTFOLIO BY THE PM S MANAGER. IT IS PRAYED THAT THE DISALLOWANCE OF PMS FEES BE DELETED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED CIT(A) FURTHER ERRED IN DISALLOWING THE SAID PMS FEES CLAIMED DEDUCTIBLE FROM THE CAPITAL GAINS WITHOUT CONSIDERING THE DECISION IN FAVOUR OF THE APPELLANT GIVEN BY THE HONOURABLE PUNE TRIBUNAL IN 2 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD APPELLANT'S OWN CASE ON THE BACKDROP OF THE SAME SE T OF FACTS FOR THE PRECEDING A.Y. 2005-06 AND 2006-07 AN D WHICH SQUARELY COVERED THE ISSUE INVOLVED. 3. THE LEARNED CITA ERRED IN NOT CONFRONTING THE APPEL LANT WITH THE CASE LAW REFERRED TO BY HIM IN THE ORDER A ND NOT GIVING AN ADEQUATE OPPORTUNITY TO THE APPELLANT TO PRESENT ITS CASE AND IN ORDER TO ALLOW THE APPELLAN T TO MAKE SUBMISSIONS AND REBUT THE FINDINGS GIVEN. YOUR APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR DEL ETE THE ABOVE GROUNDS. 2. THE ASSESSEE IS A NON-BANKING FINANCIAL COMPANY (NBFC) REGISTERED WITH THE RBI AS AN INVESTMENT COMPANY. THE COMPANY BELONGS TO THE ENTREPRENEURS OF THERMAX GROUP OF CO MPANIES WITH THE OBJECT TO HOLD (IN CONJUNCTION WITH OTHER TWO HOLDING COMPANIES) CONTROLLING STAKE IN THERMAX LTD. THE I SSUE BEFORE US IS WITH REGARD TO DISALLOWANCE MADE BY THE ASSES SING OFFICER OF RS.5,77,03,093/- CLAIMED BY THE ASSESSEE AS PORT FOLIO MANAGEMENT FEES (HEREINAFTER REFERRED TO AS PMF) PA ID TO ENAM AMC PVT. LTD. THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE HAS CLAIMED DEDUCTION FOR AN AMOUNT OF RS.5,77,03,0 93/- BEING PMF PAID TO ENAM AMC PVT. LTD. AGAINST THE CAPITAL GAINS U/S.48 OF THE ACT. IN THE OPINION OF THE ASSESSING OFFICER, THE SAID EXPENDITURE COULD NOT BE SAID TO BE INCURRED W HOLLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANSFER OF THE ASSETS THAT GAVE RISE TO THE CAPITAL GAINS ADMITTED BY THE ASSESSEE. THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO JUSTIFY WHY DEDUCTION CLAIMED FOR SUCH EXPENDITURE SHOULD NOT BE DISALLOW ED. THE STAND OF THE ASSESSEE HAS BEEN THAT IT HAD ENTERED INTO AN INVESTMENT MANAGEMENT AGREEMENT WITH ENAM FOR MANAG ING ITS INVESTMENT PORTFOLIO AND THAT ALMOST 95% OF ITS INV ESTMENTS MADE DURING THE YEAR WERE THROUGH THE SAID AGENCY. IT WAS CONTENDED THAT THE OBJECTIVE OF THE AGREEMENT ENTER ED INTO WAS TO PROVIDE THE COMPANY WITH A STRUCTURE THAT CAN ACHIE VE PRESERVATION AND LONG TERM GROWTH OF ITS CAPITAL BY BRINGING INTO 3 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD PLAY PROFESSIONAL EXPERTISE IN THE FIELD. ELABORAT ING THE VARIOUS ASPECTS OF THE SERVICES RENDERED BY THE AGENCY IN M ANAGING THE INVESTMENT PORTFOLIO OF THE ASSESSEE COMPANY, IT WA S STATED ON BEHALF OF ASSESSEE THAT THE FEES PAID TO THEM WERE WHOLLY AND EXCLUSIVELY FOR EARNING THE INCOME OFFERED TO TAX U NDER THE HEAD CAPITAL GAINS AND IT WAS ASSERTED THAT SUCH FEES PA ID HAD DIRECT, PROXIMATE AND ONE TO ONE NEXUS WITH THE EARNING OF CAPITAL GAINS AND THAT THE SAID FEES PAID IN TERMS OF A CONTRACTU AL AGREEMENT. FURTHER, INVOKING THE CONCEPT OF REAL INCOME, IT WA S ASSERTED BY THE ASSESSEE THAT THE SAID EXPENDITURE HAVING BEEN PAID, WHAT COULD BE TAXED IN THE HANDS OF THE ASSESSEE WAS ONLY THE NET AMOUNT EARNED BY THE ASSESSEE. THUS, IT WAS SUBMIT TED ON BEHALF OF ASSESSEE THAT THE EXPENDITURE WAS CORRECT LY CLAIMED AS DEDUCTION FROM THE COMPUTATION OF CAPITAL GAINS. 3. HOWEVER, THE ASSESSING OFFICER, THOUGH DID NOT D ISPUTE THE CONTENTION OF THE ASSESSEE THAT THE PMS FEES WERE P AID TO THE PORTFOLIO MANAGER AS A COMPENSATION TOWARDS A BUNDL E OF SERVICES OFFERED BY THE PMS, DID NOT SUBSCRIBE TO T HE CLAIM OF THE ASSESSEE THAT SUCH FEES PAID WERE WHOLLY AND EXCLUS IVELY IN CONNECTION WITH THE TRANSFER OF THE CAPITAL ASSET M ANAGED BY THE PORTFOLIO MANAGERS. REFERRING TO THE VARIOUS ASPEC TS OF THE SERVICES RENDERED BY THE PORTFOLIO MANAGER AND THE MANNER IN WHICH THE PMS FEES WERE COMPUTED AND QUANTIFIED, TH E ASSESSING OFFICER EMPHASIZED THAT AS PER ASSESSEE'S OWN SUBMI SSION, THE CAPITAL GAINS IN QUESTION HAD ARISEN SOLELY AND EXC LUSIVELY OUT OF THE AGREEMENT ENTERED INTO WITH PORTFOLIO MANAGEMEN T SERVICES. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE FA ILED TO SUBSTANTIATE AS TO HOW IT COULD BE CLAIMED THAT THE COMPENSATION PAID TO THE PORTFOLIO MANAGEMENT SERVICES WOULD AMO UNT TO EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH THE TRANSFER OF CAPITAL ASSETS. ACCORDING TO THE AS SESSING OFFICER, SUCH EXPENSES WHICH WERE DIRECTLY INCURRED WHILE TR ANSFERRING 4 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD THE ASSETS SUCH AS DEMAT ACCOUNT CHARGES PAID DIREC TLY TO A DEPOSITORY PARTICIPANT COULD BE CLAIMED AS EXPENDIT URE WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION WITH THE TRA NSFER OF SHARES AND SECURITIES BUT PAYMENTS MADE TO A PORTFOLIO MAN AGER COULD NOT BE SAID TO BE ON A SIMILAR FOOTING. THE ASSESS ING OFFICER STRESSED UPON THAT A PORTFOLIO MANAGEMENT SERVICE A CTS AS A SERVICE INTERMEDIARY AND THE FEES PAID TO THEM COUL D NOT BE TERMED AS AN EXPENDITURE INCURRED WHOLLY AND EXCLUS IVELY IN CONNECTION WITH THE TRANSFER OF CAPITAL ASSETS BECA USE THERE WAS NO DIRECT CORRELATION BETWEEN THE SERVICES OF A POR TFOLIO MANAGER AND THE ACTUAL TRANSFER OF CAPITAL ASSETS REPRESENT ED BY THE LISTED SECURITIES OF CORPORATE BODIES. THE ASSESSING OFFI CER CONCLUDED THAT THE FEE STRUCTURE, METHOD OF ACCOUNTING AND TH E CONTRACTUAL OBLIGATION STRUCTURED BY WAY OF AN OVERRIDING TITLE DO NOT ADD UP TO ALTER THE NATURE AND CHARACTER OF THE EXPENDITUR E IN QUESTION. ACCORDINGLY, REJECTING THE CLAIM OF THE ASSESSEE, T HE ASSESSING OFFICER HELD THAT THE PAYMENTS MADE TO PORTFOLIO MA NAGEMENT SERVICES COULD NOT BE CLAIMED AS A DEDUCTION. 4. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AS DETAILED IN PARA 4 OF CIT(A) ORDER AND HAVING CO NSIDERED THE SAME, THE CIT(A) UPHELD THE DECISION OF ASSESSING O FFICER IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ROSHANBABU MOHAMMED HUSSEIN MERCHANT (2005) 275 ITR 231 (BOM), WHEREIN IT WAS HELD THAT THE EXPENDITURE ON ACCOUNT OF PMS FEES IS NEITHER COST OF ACQUISITION OF THE S HARES IN QUESTION NOR COST OF IMPROVEMENT THERETO NOR INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANSFER OF ASSE TS AND THE ASSESSING OFFICER IS THEREFORE LEGALLY JUSTIFIED IN REJECTING THE CLAIM FOR DEDUCTION OF THE PMS FEES OF RS.5,77,03,0 93/- U/S.48 OF THE ACT AND THE CIT(A) UPHELD THE SAME. 5 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE CIT(A) ERRED IN UPHOLDING THE DI SALLOWANCE OF PORTFOLIO MANAGEMENT SERVICES (PMS) FEES PAID BY TH E ASSESSEE RS.5,77,03,093/- AND CLAIMED AS DEDUCTION FROM THE CAPITAL GAINS BEING EXPENSES INCURRED WHOLLY AND EXCLUSIVEL Y IN CONNECTION WITH THE PURCHASE AND SALE OF SECURITIES MANAGED UNDER THE PORTFOLIO BY THE PMS MANAGER. ACCORDINGL Y, THE DISALLOWANCE OF PMS FEE BE DELETED. THE LEARNED AU THORIZED REPRESENTATIVE HAS ARGUED THAT THE CIT(A) FURTHER E RRED IN DISALLOWING THE SAID PMS FEES CLAIMED DEDUCTIBLE FR OM THE CAPITAL GAINS WITHOUT CONSIDERING THE DECISION IN FAVOUR OF THE ASSESSEE DECIDED BY ITAT PUNE BENCH IN THE BACKDROP OF THE S AME SET OF FACTS AS DISCUSSED BELOW WHICH SQUARELY COVERED THE ISSUE INVOLVED. ACCORDINGLY, THE CLAIM OF THE ASSESSEE B E ALLOWED. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTA TIVE HAS SUPPORTED THE ORDER OF AUTHORITIES BELOW AND SUBMIT TED THAT THE DECISION OF AUTHORITIES ARE FORTIFIED BY THE RATIO OF JURISDICTIONAL HIGH COURT IN THE CASE OF ROSHANBABU MOHAMMED HUSSE IN MERCHANT (SUPRA). 6. THE ISSUE BEFORE US IS WITH REGARD TO DEDUCTION OF PART OF PORTFOLIO MANAGERS (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. AND OTHERS IN ITA NO.94/PN/2012, HAS DECIDED A SIMILAR ISSUE IN FAVOU R OF THE ASSESSEE BY OBSERVING AS UNDER: 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND ALSO THE PRECEDENT IN THE ASSESSEES OWN CASE B Y WAY OF THE ORDER OF THE TRIBUNAL DATED 25.07.2012 (SUPRA). IN THE SAID CASE, THE TRIBUNAL CONSIDERED THE ALLOWABILITY OF EXPENDITURE INCURRED BY WAY OF PAYMENT OF FEES OF E NAM ASSET MANAGEMENT COMPANY PVT. LTD. IN TERMS OF THE INVESTMENT AGREEMENT DATED 01.01.2005, WHICH IS PRE CISELY THE ISSUE BEFORE US ALSO. THE TRIBUNAL REFERRED TO ITS EARLIER DECISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 VIDE ORDER DATED 31 ST MAY, 2011 (SUPRA) AND NOTICED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR O F THE 6 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD ASSESSEE. THEREAFTER, THE TRIBUNAL NOTED THAT AGAIN ST THE DECISION OF THE TRIBUNAL DATED 31 ST MAY, 2011 (SUPRA), REVENUE PREFERRED AN APPEAL BEFORE THE HONBLE SUPR EME COURT ONLY ON THE ISSUE TREATMENT OF INCOME FROM TH E SALE OF SHARES AS CAPITAL GAIN OR BUSINESS INCOME AND T HAT THE REVENUE HAD NOT PREFERRED ANY APPEAL AGAINST THE OR DER OF THE TRIBUNAL ALLOWING THE CLAIM OF DEDUCTION OF EXP ENDITURE BY WAY OF PORTFOLIO MANAGEMENT FEE REPRESENTING PAY MENTS TO ENAM ASSET MANAGEMENT COMPANY PVT. LTD. WHILE COMPUTING THE INCOME UNDER THE HEAD CAPITAL GAINS . AFTER NOTICING THE AFORESAID THE TRIBUNAL CONCLUDED AS UN DER IN PARA 11 OF ITS ORDER DATED 25.07.2012 :- 11. THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HOMI K. BHABHA 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 T HE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF KRA HOLDI NG & TRADING WAS NOT FOLLOWED BY THE MUMBAI BENCH IN THE ABOVE CITED DECISION. THE MUMBAI BENCH FOLLOWIN G OTHER DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL DECLINED TO FOLLOW THE DECISION IN THE CAS E 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 ASSESSEES OWN CASE HAS ALREADY TAK EN A VIEW IN FAVOUR OF THE ASSESSEE. SINCE THE AO & CI T(A) HAVE FOLLOWED THE ORDER FOR EARLIER YEAR IN THE CAS E OF THE ASSESSEE AND SINCE THE ORDER OF CIT(A) FOR EARL IER YEAR HAS BEEN REVERSED BY THE TRIBUNAL, THEREFORE, UNLESS AND UNTIL THE DECISION OF THE TRIBUNAL IS REVERSED BY A HIGHER COURT, THE SAME IN OUR OPINION SHOULD BE FOLLOWED. IN THIS VIEW OF THE MATTER, WE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2004-05 ALLOW THE CLAI M OF THE PORTFOLIO MANAGEMENT FEES AS AN ALLOWABLE EXPENDITURE. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 14. FOLLOWING THE AFORESAID PRECEDENT, WHICH HAS CONSIDERED THE SIMILAR OBJECTIONS OF THE CIT(A), IN OUR CONSIDERED OPINION, THE ORDER OF THE CIT(A) IN THE PRESENT CASE IS UNTENABLE AND WE ACCORDINGLY SET-ASIDE THE SAME AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPU GNED ADDITION. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AC CORDINGLY ALLOWED. 7 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD 6.1 WE ALSO FIND IN THE CASE OF DCIT VS. KRA HOLDIN G & TRADING PVT. LTD. IN ITA NO.356/PN/2011, ITAT, PUNE A BEN CH HAS DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE B Y OBSERVING AS UNDER: 10. THE ABOVE DECISION OF THE TRIBUNAL WAS NOT AVA ILABLE BEFORE THE CIT(A) WHILE ADJUDICATING THE ISSUE. WE FIND THE REVENUE HAS GONE ON APPEAL AGAINST THE ORDER OF THE TRIBUNAL ON THE ISSUE OF TREATMENT OF INCOME FROM P ORTFOLIO MANAGEMENT SCHEME AS CAPITAL GAIN OR BUSINESS INCOME. THE RELEVANT ORDER OF THE HONBLE HIGH CO URT IN 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 TH E REVENUE HAS GONE ON APPEAL AGAINST THE ORDER OF THE TRIBUNA L 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 N OTICE BY THE LEARNED DR WHEREIN IT WAS HELD THAT PORTFOLI O MANAGEMENT SCHEME FEES IS NOT DEDUCTIBLE AGAINST CA PITAL GAINS. THE DECISION OF THE PUNE BENCH OF THE TRIBU NAL IN THE CASE OF KRA HOLDING & TRADING WAS NOT FOLLOWED BY THE MUMBAI BENCH IN THE ABOVE CITED DECISION. THE MUMB AI BENCH FOLLOWING OTHER DECISIONS OF THE COORDINATE B ENCHES OF THE TRIBUNAL DECLINED TO FOLLOW THE DECISION IN THE CASE OF KRA HOLDING & TRADING (SUPRA). IT IS THE SETTLED P ROPOSITION 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 ASSESS EES OWN CASE HAS ALREADY TAKEN A VIEW IN FAVOUR OF THE ASSE SSEE. SINCE THE AO & CIT(A) HAVE FOLLOWED THE ORDER FOR E ARLIER YEAR IN CASE OF THE ASSESSEE AND SINCE THE ORDER OF CIT(A) FOR EARLIER YEAR HAS BEEN REVERSED BY THE TRIBUNAL THER EFORE, UNLESS AND UNTIL THE DECISION OF THE TRIBUNAL IS RE VERSED BY A HIGHER COURT, THE SAME IN OUR OPINION SHOULD BE A LLOWED. IN THIS VIEW OF THE MATTER, WE RESPECTFULLY FOLLOWI NG THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 200 4-05 8 ITA NO.825 OF 13 RDA HOLDING & TRADING PVT. LTD ALLOW THE CLAIM OF THE PORTFOLIO MANAGEMENT FEES AS AN ALLOWABLE EXPENDITURE. THE GROUND RAISED BY THE AS SESSEE IS ACCORDINGLY ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. FACTS BEING SIMILAR, SO FOLLOWI NG THE SAME REASONING, WE DO NOT AGREE WITH THE FINDINGS OF CIT (A) ON THE ISSUE. IN VIEW OF ABOVE, WE HOLD THAT PORTFOLIO MA NAGEMENT 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 A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 30 TH OF JULY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 30 TH JULY, 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A)-III, PUNE 4) THE CIT-III, PUNE 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE