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TMI Blog2017 (9) TMI 1767X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to maintaining corporate structure. It is the view that 25% of salary expenses incurred on directors as well as other staffs can be considered as having been incurred in connection with maintaining corporate structure. Accordingly modify the order passed by CIT(A) on this issue and direct the AO to treat 25% of the salary expenses as revenue expenses incurred in maintaining corporate structure. The assessee has not given details of office expenses of ₹ 3,121/-. Hence, in my view, 50% thereof may be considered as incurred in maintaining corporate structure and allowed. Interest expenditure, demat charges and security transaction charges cannot be considered as expenses relating to maintaining corporate structure. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,03,53,890/- by treating capital gains as business income; disallowing administrative expenses; adding deemed dividend and adding transactions not disclosed in the books. It appears that the assessee had claimed all administrative expenses as deduction against long term capital gain and the same was rejected by the AO. In the appeal filed before Ld CIT(A), the first appellate authority deleted all the additions/adjustments made by the AO. The revenue preferred appeal challenging the order of Ld CIT(A) before the Tribunal. The Tribunal confirmed the order of Ld CIT(A) in respect of all items except that relating to administrative expenses. The Tribunal restored the issue relating to administrative expenses with the following observations:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as paid to the Managing director and a very senior Government officers. It was further submitted that expenses were incurred on Electricity, Telephone, office and depreciation. Accordingly it was submitted that all these expenses should be allowed as business expenditure. The AO, however, allowed expenses relating to filing fee, professional tax, audit fee and bank charges. Accordingly he disallowed following expenses:- Salary and allowances Rs. 13,37,196/- Stock exchange expenses ₹ 22,190/- Demat charges Rs. 804/- Legal expenses ₹ 4,556/- Security transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration and hence the AO was justified in disallowing other expenses. 6. I have heard rival contentions and perused the record. I notice that the assessee has generated only capital gains on sale of shares during the year under consideration. It has acquired stock exchange card during the year under consideration, i.e., the business activities of the assessee was not commenced during the year under consideration. Since the present assessee is a company, which is required to incur certain expenses to maintain its corporate status, the Tribunal held that such type of expenses should be treated as revenue expenditure and should be allowed. 7. The Ld A.R argued that the expenses have been incurred by the assessee on account of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been mainly used in connection with the investment activities only. At the same, it is also true that the directors and employees would have contributed in connection with the corporate activities related to maintaining corporate structure. In this view of the matter, I am of the view that 25% of salary expenses incurred on directors as well as other staffs can be considered as having been incurred in connection with maintaining corporate structure. Accordingly I modify the order passed by Ld CIT(A) on this issue and direct the AO to treat 25% of the salary expenses as revenue expenses incurred in maintaining corporate structure. 10. The assessee has not given details of office expenses of ₹ 3,121/-. Hence, in my view, 50% thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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