Tribunal upholds disallowance of fees, depreciation, and expenses in tax appeal

The Tribunal upheld the disallowance of fees paid under Portfolio Management Scheme against Short Term Capital Gain, disallowance of depreciation and society charges on residential premises, and ad-hoc disallowance of expenses. One issue was referred back to the Assessing Officer for fresh consideration. The appeal was partly allowed, confirming most of the disallowances.

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Issues involved:
1. Disallowance of fees paid under Portfolio Management Scheme (PMS) as not deductible expenditure against Short Term Capital Gain (STCG).
2. Disallowance of depreciation and society charges on residential premises used for business purpose.
3. Ad-hoc disallowance of expenses aggregating to a certain amount.

Issue 1: Disallowance of fees under PMS against STCG:
The assessee contested the disallowance of Rs.9,48,785 paid under PMS as non-deductible expenditure for STCG. The Assessing Officer disallowed the claim, stating it was not wholly and exclusively for the transfer of capital asset. The Tribunal upheld this decision based on previous rulings for similar cases. The issue was decided against the assessee by dismissing the appeal.

Issue 2: Disallowance of depreciation and society charges on residential premises:
The Assessing Officer disallowed depreciation of Rs.9,49,005 and society charges of Rs.1,62,567 on premises other than the office, as they were not allowed in previous years. The Tribunal referred to a similar case for the assessment year 2008-09 and decided to restore the matter back to the Assessing Officer for fresh consideration. The Tribunal allowed the ground for statistical purposes, following the principle of natural justice.

Issue 3: Ad-hoc disallowance of expenses:
An ad-hoc disallowance of 5% on various expenses totaling to Rs.20,91,282 was made by the Assessing Officer due to lack of supporting details and vouchers. The Tribunal, based on a previous ruling for the assessment year 2008-09, upheld the disallowance. The appeal was partly allowed, confirming the disallowance of expenses.

In summary, the judgment addressed three main issues: disallowance of PMS fees against STCG, disallowance of depreciation and society charges on residential premises, and ad-hoc disallowance of expenses. The Tribunal upheld the disallowances based on previous rulings and directed the restoration of one issue back to the Assessing Officer for reevaluation. The appeal was partly allowed, with the disallowances being upheld for the most part.

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