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TMI Blog2012 (3) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case is a trading and investment company. The return of income for the year under consideration was filed by it on 29-1-2006 declaring total income of ₹ 4,40,062/-. In the profit loss account filed along with the said return, portfolio management fees of ₹ 3,89,506/-, Dmat charges of ₹ 58,137/-, security transaction charges of ₹ 85,083/- and service tax of ₹ 39,730/- were debited by the assessee. According to the AO, the said expenses debited by the assessee in the profit loss account and claimed as business expenses were incurred in relation to earning of short term capital gain and the same were not allowable as deduction either as business expenses or even as deduction while computing the short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income of ₹ 5,72,456/- and penalty u/s 271(1)(c) amounting to ₹ 1,71,750/- was imposed by him being 100% of the tax sought to be evaded on the said income. 3. The penalty imposed by the AO u/s 271(1)(c) was challenged by the assessee in an appeal filed before the learned CIT(Appeals). After considering the submissions made on behalf of the assessee as well as the material available on record, the learned CIT(Appeals) found that portfolio management fees of ₹ 3,89,506/- and security transaction charges of ₹ 85,083/- were disallowed and added by the assessee itself in the computation of total income. He held that penalty imposed by the AO u/s 271(1)(c) in respect of the said two amounts added again by the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case is a trading and investment company and the Dmat charges and service tax were claimed by it as deduction in the computation of business income being expenses incurred for the purpose of its business. Although the said claim has not been accepted in the quantum proceedings and addition has been made to the total income of the assessee on this count, we are of the view that the claim made by the assessee for deduction on account of Dmat charges and service tax as business expenses was a bonafide claim having regard to the facts of the case including especially the nature of assessee s business. Moreover, there is no allegation that has been made either by the AO or by the learned CIT(Appeals) that any particulars filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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