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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
Assessment Year: 2013-14 Avadh Mercantile Co. Ltd…..………….…..............................…..……………….…...……..…….............Appellant 4, India Exchange 6th Floor Kolkata – 700 001 [PAN : AACCA 1137 F] Vs. Income Tax Officer, Ward-4(3), Kolkata……..………………………………..………...…...........Respondent Appearances by: Shri Raj Kumar Agarwal, A/R, appeared on behalf of the assessee. Shri Satyajit Mondal, Addl. CIT Sr. D/R. appearing on behalf of the Revenue. Date of concluding the hearing : March 27th , 2019 Date of pronouncing the order : March 29th , 2019 ORDER Per J. Sudhakar Reddy, AM :- This is an appeal filed by the assessee directed against the order of the Learned Commissioner of Income Tax (Appeals) - 2, Kolkata, (ld. CIT(A)) passed u/s. 250 of the Income Tax Act, 1961, (the ‘Act’), dt. 21/08/2018, for the Assessment Year 2013-14.
The assessee is a domestic company. It deployed funds in interest bearing securities through ICICI Prudential Management Fund and it paid the said fund managers, portfolio management fees for the management services. This was claimed as revenue expenditure. The Assessing Officer was of the view that this fee paid ICICI Prudential Management Fund, was capital in nature and disallowed the same. The ld. CIT(A) confirmed this disallowance.
After hearing rival contentions, I find that the assessee is an investment company and deploys its funds in both debt portfolio as well as other investments. It had taken the services of ICICI Prudential Management Fund, for managing its investments in debt portfolio. The fund manager have paid/credited the income accruing on such investments to the assessee, after deducting tax therefrom their portfolio management fee. On these facts, we are of the considered opinion that