Venture Capital Company and Venture
Capital Fund (VCF) are given status of pass through vehicles for purpose of
treatment of income received on account of investment made in venture capital
undertaking. Therefore, assessee, which invests in a VCF, would be entitled to
book expenditure incurred by VCF as if same had been incurred directly by
assessee.
Facts:
a)
The
assessee-company received interest in respect of investment made in SARA fund,
a SEBI registered VCF.
b)
It offered interest
to tax on net basis after claiming the deduction of its share of expenditure
incurred by SARA fund.
c)
Assessing Officer (AO) taxed interest income received by assessee from
VCF on gross basis without giving deduction of assessee’s share of expenses
incurred by VCF for earning said income.
d)
The contention of the AO was that the said expenses were incurred by VCF
and not by assessee.
e)
The Commissioner (Appeals) confirmed
the order of the AO. Aggrieved assessee filed the instant appeal before the
tribunal.
