DMI Alternatives Private Limited Vs Additional Commissioner (Adjudication) & Ors (Delhi High Court)
Delhi High Court held that Investment Manager Expenses would constitute part of the management fee or not would have to be analysed on the basis of Investment Management Agreement. Accordingly, held that the interpretation of such agreements which involves a factual analysis are beyond the scope of writ jurisdiction.
Facts- The present petition has been filed by the Petitioner – DMI Alternatives Private Limited under Articles 226 and 227 of the Constitution of India, inter alia, assailing the Show Cause Notice dated 27thJuly, 2024 and consequential order dated 30th January, 2025.
According to the Petitioner, the impugned order wrongly seeks to tax the entire amount earmarked for fund expenses, which are liable to be reimbursed to the Petitioner at actuals as and when incurred, by deeming the same as consideration towards supply of services by the Petitioner to the fund.
The short issue that has been pressed by the Petitioner is that the impugned order lacks jurisdiction as there has been a misinterpretation of the Investment Management Agreement dated 19thSeptember, 2017 and similar other agreements. It is submitted that under the said agreement, there is a clear difference between investment management fee, which is charged by the Petitioner as set out under Clause 3 of the Agreement, as against the operational expenses and other expenses, which the Petitioner incurs, which would be charged to the fund which is being managed by the Petitioner under Clause 4.
