The Delhi Bench of the Income Tax Appellate Tribunal in the case Pallav Pandey Versus ACIT observed and has allowed the expenses which are incurred towards the transfer of shares. The two-member bench comprising of Judicial Member, Yogesh Kumar U.S. and the Accountant Member, B.R.R. Kumar in the case observed that the expenses incurred by the assessee are allowable transfer expenses as per Section 48 of the Income Tax Act, 1961 and an error has been committed by both the lower authorities wherein disallowing the expenses incurred by the assessee. In the present case, the assessee filed the return for the assessment year 2016–2017, wherein declaring an income and claiming transfer expenses against the sale consideration. Thus, the case of the assessee was being selected for scrutiny under CASS and the assessment proceedings were initiated, and during the assessment proceedings, it has been contended by the assessee that the expenses were incurred wholly and exclusively for the transfer of shares and that expenses are eligible as per Section 48 of the Income Tax Act of 1961. The transfer expenses has been disallowed by the AO on the basis that the transfer expenses claimed by the assessee are in the nature of fees for advisory services and management consulting. Thus, the court cannot consider allowable transfer expenses as per Section 48 of the Income Tax Act, 1961. An appeal has been preffered by assessee before the CIT (A). The transfer expenses have been allowed by CIT(A) to the extent of Rs. 1,50,000 (being 0.1% of the transaction cost), and the disallowance of the balance of Rs. 24,42,818 was confirmed. Further, it has been submitted by AO and the CIT(A) erred in not allowing all expenses incurred in connection with earning long-term capital gains. Thus, the said expenses were being paid for seeking management consultancy from Signal Hill in respect of a transfer of shares, but they are being disallowed on the basis that the management consultancy expenses cannot be considered eligible transfer expenses as per Section 48 without bringing any material on record. Although, it has not been questioned by the assessee’s service that it made a mistake by limiting the expenses to only 0.1% of the transaction cost. It has also been argued by the department that the order of CIT(A)’s wherein limiting the expenses to 0.1% of the transaction was reasonable and that the Tribunal should not intervene. Therefore, it has been determined by the Tribunal that M/s Signal Hills’ services were solely used for the sale of private limited company shares. When it is being compared to the invoice raised by M/s Signal Hills, the payment was made through the banking channel. Thus, there being on record to suggest or no material brought on record by the AO to suggest that transfer expenses were not incurred wholly and exclusively for the purpose of transferring shares held by the assessee.