If an asset management company, on account of business exigencies, collects a lesser amount of fees than the ceiling prescribed, it is not open to the AO to make additions on a notional basis, as held by MumHC in CIT v Templeton Asset Management (India) Pvt Ltd — In favour of: The assessee.
If an asset management company does not charge the mutual funds part of the expenses actually incurred due to the bona fide commercial decision, then no part of the expenditure can be disallowed.
Decided on: 12 September 2011.
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