DEEPAK GURUSHANKAR TRIPATHI,PANJIM - GOA vs. DCIT CIRCLE 1(1) PANJIM, PANJIM GOA

ITA 258/PAN/2025Status: DisposedITAT Panaji23 October 2026AY 2016-176 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the expenses amounting to Rs. 83,47,183/- were incurred wholly and exclusively in connection with the transfer of unlisted equity shares and are therefore allowable under Section 48(i) of the Income Tax Act, 1961. The Tribunal noted that the genuineness of the sale transaction was not in dispute. It observed that the assessee, along with other shareholders, had engaged 7i Advisors LLP to find a buyer and secure the best price for their shares in M/s. Lilac Medicare Pvt. Ltd. The advisory fees and event/execution expenses were considered incidental to setting up buyer representative functions, preparing documents, finding buyers, and locking the deal at the best price. The Tribunal found a direct nexus between the consultancy fees and the sale transaction, supported by the judgment in Kaushalya Devi Vs. CIT, which allows expenses inextricably linked to the transfer of a capital asset. Consequently, the disallowance made by the Assessing Officer was deleted, and the grounds of appeal were allowed.

What were the facts?

The assessee, Deepak Gurushankar Tripathi, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order of the NFAC, Delhi, which upheld an assessment order passed by the DCIT, Circle-1(1), Panaji. The assessment year in question is 2016-17. The dispute centers on the disallowance of expenses amounting to Rs. 83,47,183/- claimed by the assessee against capital gains arising from the sale of unlisted shares of M/s. Lilac Medicare Pvt. Ltd. The Assessing Officer disallowed these expenses, primarily advisory fees and event and execution charges, on the grounds that the assessee failed to establish a direct link between these payments and the sale of securities, thus deeming them not loadable to the cost of acquisition. The CIT(A) upheld this disallowance, stating the burden of proof was on the assessee.

What were the issues?

1. Whether the expenses amounting to Rs. 83,47,183/-, consisting of advisory fees and event and execution charges, incurred by the assessee in connection with the transfer of unlisted shares of M/s. Lilac Medicare Pvt. Ltd. are deductible under Section 48(i) of the Income Tax Act, 1961. Assessee's Contentions: The assessee argued that these expenses were incurred wholly and exclusively in connection with the transfer of capital assets. They relied on the written submissions, a detailed paper book containing transaction details, agreements with advisors (7i Advisors LLP), invoices, and other expense details. The assessee cited the Delhi High Court judgment in Kaushalya Devi Vs. CIT, which allowed expenses with a close nexus to the transfer of property as deductible under Section 48(i). Revenue's Contentions: The learned Senior Departmental Representative supported the order of the CIT(A). No specific arguments or reliance on authorities were recorded for the revenue.

Which sections of the Income-tax Act were involved?

Section 48(i),Section 143(3),Section 142(1),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI DB BENCH, PANAJI

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Pramod Vaidhya, Adv
For Respondent: Shri Mayur Kamble, Sr. DR
Hearing: 20.08.2026Pronounced: 23.10.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2016-17 is directed against the order dated 23.06.2025 of ld. NFAC, Delhi emanating out of Assessment Order dated 23.12.2018 passed u/s.143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

2.

The sole grievance of the assessee is against the disallowance of expenses at Rs.83,47,183/- allegedly claimed against transfer of capital gains.

3.

Brief facts of the case are that the assessee is an individual and declared income of Rs.33,54,12,110/- in the income-tax return for A.Y. 2016-17 furnished on 13.10.2016. Case selected for scrutiny under

The order continues below.

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