Nature of expenditure incurred in relation to pams

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This query is : Resolved

Vikas Jain (Querist)
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06 January 2012 Assessee has incurred upfront Management fees in relation to HDFC Real Estate Portfolio at initial stage of Fund,Fund Generate income in terms of Dividend, Interest, capital Gain. majore Income from Dividend and Interest.

Assessee claim the Expenditure u/s 57 but A.O. denied the claim stated that this Investment is having a Nature of Capital Investment and Upfront Fees is being capitalized in the cost of Investment but can not allowed u/s 57.

Whether the Expenditure is revenue in nature or capital?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 January 2012 The AO is right. It is an expenditure which has been incurred for acquiring some capital asset only and it has to be capitalised. AOs are not always wrong as we think.

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