Case Law Details
ASK Investment Managers Limited Vs DCIT ( ITAT Mumbai)
Assessee was engaged in the business of Portfolio Management Services (PMS) and because uncertainty of stock market the performance fees which the assessee earned from its client could be ascertained only on the last day of the year. The ld. Counsel also submitted that it was impossible to estimate the performance fees as its earning will be based on the performance of the stock market upto the last date of the year.
The CPC, Banglore has charged excess interest u/s 234C of the Act at Rs.8,51,047/- as referred supra in this order. The assessee has submitted that it is engaged in the business Portfolio Management Services and excess interest of Rs.8,51,047/- was charged by the CPC, Banglore because of performance fees of Rs.1,21,13,63,859/- which was reported by the assessee from its client on 31.03.2019. In this regard, the ld. Counsel submitted that the ld. CIT(A) has not considered the material fact that the performance fees cannot be estimated before hand for the purpose of calculation of advance tax payable during the year because of uncertainty about the equity market since the performance fees can be ascertained by the assessee only on the last day of the year based on the stock market position as at the end of that day. In this regard, we have also perused the decision of ld. CIT(A) in the case of the assessee itself for assessment year 2008-09 dated 05.05.2015 placed in the paper book wherein after considering the decision of Hon’ble Bombay High Court in the case of Prime Securities Ltd. Vs. ACIT (333 ITR 464) and decision of ITAT, in the case of Kotak Securities Ltd., vide ITA No. 1502/Mum/2007 and decision of ITAT, Mumbai in the case of Kumari Kumar Advani Vs. ACIT vide ITA No.7661/Mum/2013 held that in the case of the assessee it had estimated its income and liability for payment of advance tax in accordance with law that was in force, therefore, there was no failure on the part of the assessee to pay advance tax in accordance with provision of Sec. 208 and 209. In the case of Prime Securities as referred above it is held that it was not possible for the assessee to anticipate the events that were to take place in next financial year and pay advance tax on the basis of those anticipated events. After considering the findings of the ld. CIT(A) in the case of the assessee’s case for assessment year 2008-09 and the finding of various judicial pronouncements as referred supra by the ld. Counsel, we observe that lower authorities had not controverted the facts reported by the assessee that because of uncertainty about the equity market it cannot estimate before hand amount of performance fees as discussed supra for the purpose of calculation of advance tax. No material has been brought by the revenue to controvert the aforesaid factual submission made by the assessee, therefore, following the finding of judicial pronouncements in the cases as referred above we consider that decision of ld. CIT(A) is not justified, therefore, we allow the ground of appeal of the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Per Amarjit Singh (AM):
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