The assessee, engaged in the business of shares and securities, ...

Business expenses debated: PMS costs allowed, admin costs disallowed for capital gains.

Case Laws Income Tax

November 9, 2024

The assessee, engaged in the business of shares and securities, claimed administration expenses, including Portfolio Management Service (PMS) expenses, against capital gains. The Assessing Officer (AO) disallowed these expenses as excessive and not genuine. The key points are: The Income Tax Appellate Tribunal (ITAT) allowed the PMS expenses, considering the nature of the assessee's business and relying on precedents. However, general administrative expenses like salaries, depreciation, etc., were disallowed under the head 'Capital Gains' as per Section 48 of the Income Tax Act. These expenses can only be claimed against business income or adjusted u/s 71 if there is no business income. Regarding the treatment of share transactions as business or investment, the ITAT upheld the CIT(A)'s decision based on CBDT circulars, allowing the assessee to consistently follow the chosen method. The ITAT rejected the assessee's claim of bogus loss on the purchase and sale of shares, finding the explanations for the substantial price difference unconvincing and lacking prudence.

View Source

← Previous Next →

The assessee, engaged in the business of shares and securities, ...

Business expenses debated: PMS costs allowed, admin costs disallowed for capital gains.

Case Laws Income Tax

November 9, 2024

You may also like:

Surplus earned on the sale of plot - ‘capital gain‘ OR ‘business income’ - There is no clause in the partnership deed about making investment in the land and to earn...

The assessee claimed that no capital gain was chargeable on receipt from transfer of trademark as there was no cost of acquisition. However, the tribunal held that the...

Capital gain computation - lease rental expenses are related to the transfer of slump sale business while computing the capital gain u/s 48(1) or not? - The Tribunal...

Various issues related to allowability of expenses, deductions, transfer pricing adjustments, and other income tax matters for a pharmaceutical company. Key points are:...

Portfolio Management Services (PMS) fees paid is eligible for deduction while computing Short Term Capital Gain

The case involves the disallowance of expenditure incurred during business setup. The Appellate Tribunal clarified that setup of business is distinct from commencement...

Allowable as business expenses - Small contributions to local people and institution on request of employees and business associates - Section 37 of the Act contemplates...

Capital gains - sale of flat allotted by cooperative housing society - cost of acquisition, non-allowance of registration expenses and cost of improvement - cost as...

Indexation benefit allowed from date of allotment letter for capital gain on land sale. Cost of acquisition determined from books for separately maintained land parcel...

Addition on account of long term capital gains - indexed cost of acquisition - Claim of assessee that in financial year 1994- 95, the assessee has gifted certain portion...

Long term capital gain on sale of plot of land - Cost of improvement being the cost of construction of boundary wall - Having regard to the facts and circumstances of...

Set off the business losses against the capital gains u/s 71 - The assessee in the return of income did not set off the business loss against the short term capital gain....

The Appellate Tribunal considered whether the sale proceeds of residential units should be treated as capital gains or business receipts. It was found that the...

Capital gain from sale of commercial property - intra-head adjustment of loss - Benefit of carry forward of long term capital loss on the sale of shares for the current...

Capital Gain - Receipt of consolidated amount - where a gain from one of capital assets was a short-term capital gain while from other it was a long term capital gain,...

Quick Updates: