2011 (8) TMI 1117

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....ance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in confirming disallowance of short term capital loss on sale of mutual fund units u/s.94(7) in the amount of Rs. 64,13,137 without appreciating the fact that the impugned loss was incurred in respect of transactions concluded before enactment of the Finance Act, 2004, which brought amendment to sec.94(7) so as to extend period of holding of mutual fund units to nine months as against earlier period of only three months." 3. Briefly stated the relevant material facts are like this. In the course of assessment proceedings, the Assessing Officer noted that the assessee has purchased the units of mutual fund and sold them at a loss within a ver....

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....re the CIT(A). Once again it was contended by the assessee that generally retrospective provision amendment is made with a view to override an existing provision of law, which is interpreted by the Courts in a manner contrary to legislative intend, but that was not the case with provision of section 94(7), which was introduced to plug tax avoidance. It was contended that the amendment so made was not a routine amendment but an amendment which was brought about to plug tax avoidance scheme and must therefore be interpreted strictly. It was further claimed that in the present case, the appellant could not be denied deduction of loss which was allowable in terms of the law as it is stood on the date of transaction. In essence thus it was conte....

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....t exists. We, therefore, see no merits in the grievance of the assessee, and reject the same. 6. Ground No.1 is thus dismissed. 7. In ground No.2, the assessee has raised the following grievance: "On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in confirming disallowance of following expenses, which were incurred wholly and exclusively for the purpose of business carried on by the appellant during the year under appeal: a. Traveling expenses Rs. 20,10,331 b. Entertainment Rs. 1,12,196 c. Maintenance charges Rs. 2,9,699 d. Legal and professional fees Rs. 9,82,533 e. Misc. expenses Rs. 2,62,655."   8. During the course of assessment proceedings,....

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....le there were no exiting clients and the details of so-called prospective clients were not submitted. Further in regard to foreign visit to the USA and Malaysis, no details were furnished. Regarding professional services, no details were furnished that the professional services were rendered but then, the payments were made to the Director and relatives. It was in this backdrop that the Assessing officer disallowed the above expenditure claimed by the assessee. 9. The assessee is not satisfied and carried the matter in appeal before the CIT(A). The CIT(A) after considering the details submissions made by the assessee before him, confirmed the stand taken by the Assessing Officer, inter alia, observing as follows: "I have conside....

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....al services rendered by these persons especially when the said payments were made to the Director and relatives. Also the maintenance, miscellaneous and entertainment expenses have been rightly disallowed by the AO. However, some statutory expenditure which is essential for the existence of the company like audit fees, filing fees paid to the Registrar of companies etc would need to be incurred. Such expenditure has to be allowed to the appellant from the rental income." 10. Having heard the rival contentions and having perused the material on record, we find that the matter is required to be reconsidered by the Assessing Officer in the light of specific details of expenses and justification for travel and other expenses as placed on rec....