Zarah Rafique Malik Vs ITO (ITAT Mumbai)
ITAT Mumbai held that the assessee is eligible for claiming Initial Public Offer i.e. [IPO] expenses proportionate to the shareholding in terms of clause (i) of section 48 of the Income Tax Act. Accordingly, the appeal is allowed to that extent.
Facts- The case of the assessee was selected for scrutiny assessment and disallowance of Initial Public Offer expenses and Portfolio Management Services expenses were made. The appellant-assessee challenged the order dated 15.07.2025 passed by the ITO (IT) Ward 3(2)(1), Mumbai u/s.143(3) r.w.s. 144C(13) of the Income Tax Act thereby making disallowance of Rs. 3,66,14,854/- of the proportionate Initial Public Offer (IPO) expenses and Portfolio Management Services (PMS) expenses.
Conclusion- Held that the assessee is eligible for claim of IPO expenses proportionate to her shareholding and which has been rightly claimed by the assessee in terms of clause (i) of section 48 of the Act. The AO is directed to verify whether sale proceeds net of assessee’s share of expenses have been credited into assessee’s account and where the same is found to be in order, allow the expenses so found netted off from the sale consideration while computing capital gains in the hands of the assessee. The ground of appeal so taken by the assessee is thus allowed for statistical purposes.
