PMS commission allowed as deductible expenses.

 In an important ruling in the case of Ameeta Jagdish Thackersey, the Mumbai ITAT has held that Portfolio Management Service (PMS) fees are deductible while computing capital gains under Section 48 of ITA, 1961. The ITAT noted that Coordinate Benches (Delhi, Mumbai, Pune etc) have taken divergent views on this issue. In the absence of a binding decision from the Jurisdictional High Court or the Supreme Court, the ITAT upheld the view favourable to the assessee. A one pager summary of the ruling is attached below.

The ruling is also a useful reminder that where genuine divergence exists in judicial interpretation, the benefit of a reasonable alternative view cannot ordinarily be denied to the taxpayer merely because the Revenue Authorites prefers the other interpretation.