TaxTMI 
TaxTMI 
TaxTMI 
2011 (5) TMI 1087
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 by revenue and cross objection Nos.165 to 167/K/2010 by assessee are arising out of the orders of CIT(A), Central-1 Kolkata in Appeal Nos. 75/CIT(A),C-1/CC-VI/09-10, 76/CC-VI/CIT(A),C-1/09-10 and 74/CIT(A),C-1/CC-VII/09-10 all dated 21.06.2010 respectively. Assessments were framed by ACIT, C.C-VI, Kolkata for Assessment Years 2007-08 u/s. 143(3) Income Tax Act, 1961(hereinafter referred to as "the Act") vide his separate orders all dated 30.10.2009. For the sake of brevity and clarity, we dispose of all these appeals and cross objections by this consolidated order. 2. The only common issue in all these three appeals of revenue is against the order of CIT(A) in deleting the addition made by Assessing Officer by holding that profit on shar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ehalf as per agreement with them. Assessee in its books of account declared the surplus under the head Short Term Capital Gains. Assessing Officer required the assessee to explain why surplus should not be assessed as trading profit or business profit. Assessee explained that this Port Folio Managers (in short PFM) purchase and sale of shares and securities on behalf of their client are disclosed at the end of the year in accounts showing profit and loss after charging Management Fees, custody fees, audit fees and other expenses. Assessee also explained that it had always been an investor as shares and not a trader, which is evident from the past accounts and past assessment records. He also contended that he is in investment from the very ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee had always been an investor in shares and not a trader and to support this contention, the assessee filed copies of accounts for the past assessment years i.e. 2000-01 to 2005-06 and relevant copies of assessment orders for these assessment years. He enclosed these copies in his paper book. The assessee also filed copies of account for the relevant assessment year 2007-08 in his paper book which proves that shares and securities are held as investment and not stock in trade. Even the copies of PFM like Prudential ICICI Port-folio Management Services Ltd. and AUM Kotak Securities Ltd are enclosed in the assessee's paper book, clea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issue raised in all the three cross objections and since the facts and circumstances are exactly identical, except quantum involved in all three Cross Objections, we will discuss the facts from C.O. No. 165/K/2010 and decide the issue. The ground raised in CO No.165/K/2010 reads as under: "That the Ld. CIT(A) was not justified in holding that the Management fees and other expenses paid to Portfolio Managers at ₹ 1,38,108/- and Custody fees paid at ₹ 5,945/- are not allowable deductions u/s. 48 of the I. T. Act, 1961 in computing the short term capital gains derived through the Portfolio Managers." 6. We find that the Assessing Officer has disallowed expenses under the head Management fee and other expenses, custody fee and s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xpenditure is also no way said to have been incurred wholly and exclusively in connection with such transfer of the shares. These expenditure can only be said to have been made on payments to the experts to maximise the investment of the assessee. However the deduction allowable under section 48 is specific .The expenditure should must be directly related to acquisition and transfer of the Capital asset. Further the Securities Transaction Tax is not an allowable expenditure as admitted by the appellant. Considering above the A.O is directed to recalculate the S.T.C.G after disallowing the expenditure claimed under the head Management Fee, Custodian Fee and S.T.T. The income declared by the assessee under the head S.T.C.G will be enhanced ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 SOT 599 (Mum), wherein the assessee owned a flat in a Housing Cooperative Society. He paid ₹ 4 lakhs to the Housing Cooperative Society to obtain No Objection Certificate (NOC) from the Society and claimed the same as a deduction in computing capital gain on the sale of the flat. In the assessment it was disallowed as deduction. The ITAT held that the obtaining of the NOC from the Housing Cooperative Society was necessary for the purpose of sale of the flat. Therefore, it was an allowable deduction u/s. 48 of the I. T. Act in computing capital gain. 8. Now we have to examine the provision of section 48 and the relevant provisions reads as under: "(Mode of computation) 48. The income chargeable under the head "Capital gains" sh....