Ameeta Jagdish Thackersey Vs ITO (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal concerning the allowability of Portfolio Management Service (PMS) charges while computing capital gains under section 48 of the Income-tax Act, 1961. The appeal arose from the order of the Ld. CIT(A), dated 28.08.2025, which had sustained the disallowance made by the Assessing Officer under section 143(3) for Assessment Year 2011-12.
The assessee had returned total income of Rs. 72,26,297/- from salary, short term capital gain and income from other sources. In computing capital gains, the assessee claimed Rs. 8,42,360/- towards fees and charges paid to Trust Investment Advisors Pvt. Ltd. for portfolio management services. The Assessing Officer disallowed the amount on the ground that the expenditure could not be regarded as expenditure incurred wholly and exclusively in connection with transfer of the capital asset within the meaning of section 48. The CIT(A) sustained the disallowance, relying principally upon the Mumbai Tribunal decision in ACIT v. Apurva Mahesh Shah, where PMS fees and performance-linked charges had been held not deductible under section 48.
Before the Tribunal, the assessee contended that the issue was unsettled because different coordinate Benches had adopted divergent views. Reliance was placed upon KRA Holding and Trading Pvt. Ltd. v. DCIT, where PMS fees were allowed as a deduction while computing capital gains. The assessee also submitted that although the Revenue had challenged KRA Holding and Trading before the Bombay High Court, the substantial question raised before the High Court concerned whether PMS income was assessable under the head “capital gains” or “profit and gains of business or profession”; the allowability of PMS charges under section 48 was not raised as a substantial question of law.
