TaxTMI 
TaxTMI 
2022 (12) TMI 1005
X X X X Extracts X X X X
X X X X Extracts X X X X
.....O has erred in law as well as on facts in not allowing expenses of Rs. 25,92,818/- incurred in relation to earning long term capital gains. The said expenses was paid for seeking management consultancy but Ld. AO simple disallowed expenses on the basis that these management consultancy expenses cannot be considered to be allowable transfer expenses as per section 48 of the Income Tax Act,1961. Therefore, the view taken by the Ld. AO without bringing any material on record to disallowed management consultancy expenses is totally wrong and unjustified. 3. Brief facts of the case are that, the assessee filed return for the Assessment Year 2016-17 declaring an income of Rs. 29,92,980/- wherein claimed transfer expenses of Rs. 25,92,818/- ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gement consultancy from M/s. Signal Hill in respect of transfer of shares valued at Rs. 13,75,84,941/-, but the same has been disallowed on the basis that the said management, consultancy expenses cannot be considered to be eligible transfer expense as per Section 48 of the Act, without bringing any material on record. Further submitted that though the Ld. CIT(A) has not doubted the service received by the Assessee, committed an error in restricting in allowing the expenses only to 0.1% of the transaction cost. The Ld. Counsel for the assessee has taken us through the paper book and also the synopsis filed in support of the oral submission. 8. Per contra, the Ld. DR has relied on the orders of the Lower Authorities and submitted that, Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Service Fees is also an acknowledgment by the Client that it has received from Signal Hill India all Services contemplated by this Agreement and that Signal Hill India has no further obligations pursuant to this Agreement." 12. It is also found that the above said agreed payment has been made from regular bank account of the Assessee to M/s. Signal Hill, which placed at Page No. 20 of the paper book which is reproduced as under:- 13. The said payment has been made as against the invoices raised by the M/s Signal Hill which is reproduced as under:- 14. Thus, the above said payment of Rs. 28,79,121/- has been made as per the agreement dated 23/01/2014 enter into between assessee and M/s Signal Hill against the invoice dated 12/08/20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be allowed as a deduction. This, however, does not mean that the authorities, Tribunal or the Court can go into the question of subjective commercial expediency or apply subjective standard of reasonableness to disallow the expenditure on the ground that it should not have been incurred or was unreasonably large. In the absence of any statutory provision, on these aspects discretion exercised by the assessee who has incurred the said expenditure must be respected, for interference on subjective basis will lead to unpalatable and absurd results. As in the case of Section 37 of the Act, jurisdiction of the authorities, Tribunal or Court is confined to investigate and decide as to whether the expenditure was actually incurred, i.e., the exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e transaction per se. 18. In view of the above discussion, by following the ratio laid down by the Jurisdiction High Court in the case of Kausalya Devi (Supra), we are of the opinion that, the expenses of Rs. 25,92,818/- incurred by the Assessee is allowable transfer expenses as per Section 48 of the Act and both the Lower authorities have committed an error in disallowing the expenses of Rs. 25,92,818/- incurred by the Assessee. 19. Accordingly, the Ground No. 1 of the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on : 13th December, 2022. ============= Document 1 F: ONS CHOPATHICRCTS-HD-BAJALNI ON TATA COC Statement of account Ch Wake Widt 15 ....