w w w . L a w y e r S e r v i c e s . i n



Multi Act Trade & Investments P. Ltd., Mumbai v/s ITO WD 2(2)(3), Mumbai


Company & Directors' Information:- A M R INVESTMENTS PRIVATE LIMITED [Under Liquidation] CIN = U65190MH2007PTC171972

Company & Directors' Information:- K F INVESTMENTS PRIVATE LIMITED [Active] CIN = U74990KA2011PTC059232

Company & Directors' Information:- K S R (J AND K) INVESTMENTS PRIVATE LIMITED [Amalgamated] CIN = U67120JK1991PTC001234

Company & Directors' Information:- L P INVESTMENTS LIMITED [Active] CIN = U65921PB1974PLC003526

Company & Directors' Information:- M H M G INVESTMENTS LIMITED [Active] CIN = U17232RJ1988PLC049708

Company & Directors' Information:- M H M G INVESTMENTS LIMITED [Active] CIN = U17232WB1988PLC044148

Company & Directors' Information:- MULTI-ACT TRADE AND INVESTMENTS PRIVATE LIMITED [Active] CIN = U65920MH1997PTC109513

Company & Directors' Information:- S B M INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120WB1996PTC117347

Company & Directors' Information:- N P S INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120MP2005PTC017921

Company & Directors' Information:- V B INVESTMENTS PRIVATE LIMITED [Active] CIN = U17100GJ1983PTC005999

Company & Directors' Information:- V B INVESTMENTS PRIVATE LIMITED [Active] CIN = U65910GJ1983PTC005999

Company & Directors' Information:- Z K INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120MH1996PTC101783

Company & Directors' Information:- S & S INVESTMENTS LIMITED [Amalgamated] CIN = U65993TN1980PLC008148

Company & Directors' Information:- G. K. INVESTMENTS LTD [Active] CIN = U65993WB1974PLC029382

Company & Directors' Information:- A B T INVESTMENTS (INDIA) PRIVATE LIMITED [Active] CIN = U50101TZ2002PTC010085

Company & Directors' Information:- H L A INVESTMENTS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057224

Company & Directors' Information:- H A B INVESTMENTS PRIVATE LIMITED [Active] CIN = U70109PB2008PTC031708

Company & Directors' Information:- T R INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120WB1995PTC110837

Company & Directors' Information:- K D R INVESTMENTS LIMITED [Active] CIN = U65993DL1981PLC012418

Company & Directors' Information:- J S M INVESTMENTS LTD [Active] CIN = L67120WB1981PLC034027

Company & Directors' Information:- B L S INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120WB1990PTC048679

Company & Directors' Information:- R J M INVESTMENTS LTD. [Active] CIN = L67120WB1988PLC044603

Company & Directors' Information:- O K INVESTMENTS PVT LTD [Active] CIN = U51109WB1985PTC039619

Company & Directors' Information:- P G K INVESTMENTS PRIVATE LIMITED [Active] CIN = U65910TG1999PTC032278

Company & Directors' Information:- G M B INVESTMENTS PVT LTD [Amalgamated] CIN = U67120WB1985PTC038868

Company & Directors' Information:- J AND S INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993MH1978PTC020524

Company & Directors' Information:- A R K INVESTMENTS LTD [Strike Off] CIN = U65999WB1979PLC032141

Company & Directors' Information:- P N INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993TN1980PTC008346

Company & Directors' Information:- S S INVESTMENTS PVT LTD [Active] CIN = U70109AP1984PTC005156

Company & Directors' Information:- T K INVESTMENTS PVT LTD [Active] CIN = U65921PB1983PTC005651

Company & Directors' Information:- T E W INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993DL1995PTC064216

Company & Directors' Information:- E I INVESTMENTS PVT LTD [Active] CIN = U65999WB1990PTC050386

Company & Directors' Information:- O P A INVESTMENTS PVT LTD [Active] CIN = U65993WB1990PTC048178

Company & Directors' Information:- K B INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120MH1978PTC020520

Company & Directors' Information:- R N T INVESTMENTS LIMITED [Active] CIN = U51503WB1982PLC034975

Company & Directors' Information:- S D INVESTMENTS PRIVATE LIMITED [Active] CIN = U65910TG1988PTC008691

Company & Directors' Information:- Y R INVESTMENTS PVT LTD [Active] CIN = U65921PB1989PTC009356

Company & Directors' Information:- C N M P INVESTMENTS PRIVATE LIMITED [Active] CIN = U74899DL1983PTC016061

Company & Directors' Information:- S D INVESTMENTS PRIVATE LIMITED [Active] CIN = U65910AP1988PTC008691

Company & Directors' Information:- P S S INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993TZ1948PTC000143

Company & Directors' Information:- I R S INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U67120DL1987PTC027943

Company & Directors' Information:- H P M INVESTMENTS LIMITED [Strike Off] CIN = U67120DL1966PLC004591

Company & Directors' Information:- E INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65100PY2011PTC002552

Company & Directors' Information:- N V C INVESTMENTS PVT LTD [Active] CIN = U65993TG1982PTC003588

Company & Directors' Information:- A C K INVESTMENTS PVT LTD [Strike Off] CIN = U65910GJ1981PTC004097

Company & Directors' Information:- WD INDIA PRIVATE LIMITED [Strike Off] CIN = U51900MH1992PTC065679

Company & Directors' Information:- A B O INVESTMENTS PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071067

Company & Directors' Information:- M & L INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993TN1982PTC009322

Company & Directors' Information:- M S INVESTMENTS PVT LTD [Active] CIN = U67120AS1995PTC004586

Company & Directors' Information:- B P INVESTMENTS LTD [Active] CIN = U65993WB1971PLC028138

Company & Directors' Information:- B P INVESTMENTS LTD [Active] CIN = L65993WB1971PLC028138

Company & Directors' Information:- J M INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120DL2000PTC104999

Company & Directors' Information:- A P M INVESTMENTS LIMITED [Amalgamated] CIN = U65993TZ1980PLC003978

Company & Directors' Information:- J C INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120KA1979PTC003632

Company & Directors' Information:- P M P INVESTMENTS LTD [Strike Off] CIN = U65993TN1982PLC009601

Company & Directors' Information:- A V INVESTMENTS PVT LTD [Strike Off] CIN = U65910GJ1981PTC004714

Company & Directors' Information:- A P S INVESTMENTS PVT LTD [Active] CIN = U67120CH1989PTC008950

Company & Directors' Information:- R K S INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993KA1980PTC003779

Company & Directors' Information:- D P INVESTMENTS PRIVATE LIMITED [Active] CIN = U65990MH1972PTC016045

Company & Directors' Information:- G R INVESTMENTS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U74899DL1981PTC012305

Company & Directors' Information:- A K INVESTMENTS LIMITED [Strike Off] CIN = U70101WB1979PLC032240

Company & Directors' Information:- I D S INVESTMENTS PRIVATE LIMITED [Active] CIN = U00000DL1985PTC020287

Company & Directors' Information:- A & A INVESTMENTS INDIA PRIVATE LIMITED [Under Process of Striking Off] CIN = U74999TN2008PTC068491

Company & Directors' Information:- H R INVESTMENTS PVT LTD [Strike Off] CIN = U67120CH1992PTC012458

Company & Directors' Information:- A L B INVESTMENTS PVT LTD [Strike Off] CIN = U67120DL1973PTC006943

Company & Directors' Information:- L R K INVESTMENTS PRIVATE LIMITED [Active] CIN = U74899DL1981PTC012892

Company & Directors' Information:- K. B. INVESTMENTS PRIVATE LIMITED [Amalgamated] CIN = U67120OR1983PTC001163

Company & Directors' Information:- V S B INVESTMENTS PVT LTD [Active] CIN = U67120MH1995PTC164589

Company & Directors' Information:- F N A MULTI-TRADE PRIVATE LIMITED [Strike Off] CIN = U51909TN2012PTC088801

Company & Directors' Information:- C F C INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993WB1997PTC085444

Company & Directors' Information:- H A INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120DL1996PTC076439

Company & Directors' Information:- C. I. INVESTMENTS PRIVATE LIMITED [Active] CIN = U70101MP2007PTC019874

Company & Directors' Information:- G F C INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993WB1997PTC085433

Company & Directors' Information:- S G P INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65990MH1999PTC122024

Company & Directors' Information:- D D INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1990PTC042362

Company & Directors' Information:- R G INVESTMENTS PRIVATE LIMITED [Active] CIN = U67120MH1979PTC021933

Company & Directors' Information:- P R INVESTMENTS PVT LTD [Strike Off] CIN = U67190WB1995PTC069706

Company & Directors' Information:- M C G INVESTMENTS PRIVATE LIMITED [Active] CIN = U45400GJ2000PTC038748

Company & Directors' Information:- N N D INVESTMENTS PRIVATE LIMITED [Amalgamated] CIN = U65993GJ1981PTC004702

Company & Directors' Information:- C L V INVESTMENTS PVT LTD [Strike Off] CIN = U45205WB1980PTC032572

Company & Directors' Information:- V A INVESTMENTS P LTD. [Active] CIN = U65991TN1990PTC019915

Company & Directors' Information:- P A INVESTMENTS LTD [Strike Off] CIN = U65993WB1981PLC033620

Company & Directors' Information:- K P INVESTMENTS PVT LTD [Amalgamated] CIN = U65993MH1988PTC048956

Company & Directors' Information:- K S INVESTMENTS PRIVATE LIMITED [Converted to LLP] CIN = U50100TN1984PTC010634

Company & Directors' Information:- K S INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993TN1984PTC010634

Company & Directors' Information:- R L MULTI TRADE PRIVATE LIMITED [Strike Off] CIN = U51909WB2011PTC158247

Company & Directors' Information:- S C F INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1991PTC044238

Company & Directors' Information:- M P INVESTMENTS PVT LTD [Strike Off] CIN = U64991MP1974PTC001292

Company & Directors' Information:- S M B INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65921UP1994PTC016536

Company & Directors' Information:- R J INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993MH1988PTC049997

Company & Directors' Information:- U A INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U63090DL1987PTC030052

Company & Directors' Information:- M V K INVESTMENTS PVT LTD [Strike Off] CIN = U99999MH1980PTC022879

Company & Directors' Information:- R J INVESTMENTS PRIVATE LIMITED [Not available for efiling] CIN = U99999MH1988PTC049997

Company & Directors' Information:- L B INVESTMENTS PVT LTD [Strike Off] CIN = U67120MH1981PTC024692

Company & Directors' Information:- K A R INVESTMENTS PVT LTD [Strike Off] CIN = U65993TG1985PTC005344

Company & Directors' Information:- S K S INVESTMENTS PVT LTD [Strike Off] CIN = U65910GJ1981PTC004730

Company & Directors' Information:- M G INVESTMENTS PVT LTD [Active] CIN = U70109WB1949PTC017761

Company & Directors' Information:- B L INVESTMENTS PVT LTD [Strike Off] CIN = U65990GJ1982PTC005349

Company & Directors' Information:- H S INVESTMENTS PRIVATE LIMITED [Active] CIN = U74899DL1979PTC009573

Company & Directors' Information:- AND INVESTMENTS PRIVATE LTD [Strike Off] CIN = U65923DL1981PTC012382

Company & Directors' Information:- T. T. INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U67120UP1994PTC017279

Company & Directors' Information:- H T S INVESTMENTS PVT LTD [Strike Off] CIN = U65921PB1986PTC006934

Company & Directors' Information:- F C P INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U99999MH1981PTC023913

Company & Directors' Information:- R D INVESTMENTS PVT LTD [Not available for efiling] CIN = U51909PB1985PTC006323

Company & Directors' Information:- B Y INVESTMENTS PVT LTD [Active] CIN = U65990MH1980PTC022770

Company & Directors' Information:- J INVESTMENTS PRIVATE LIMITED [Active] CIN = U65993TN1979PTC007776

Company & Directors' Information:- C B M INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993TZ1984PTC001467

Company & Directors' Information:- G N & R MULTI TRADE PRIVATE LIMITED [Strike Off] CIN = U01403UP2013PTC058989

Company & Directors' Information:- 4 R INVESTMENTS PRIVATE LIMITED [Active] CIN = U65922TG2010PTC071820

Company & Directors' Information:- A D MULTI TRADE PRIVATE LIMITED [Active] CIN = U51900CT2013PTC000964

Company & Directors' Information:- A T INVESTMENTS PRIVATE LTD [Active] CIN = U74899DL1986PTC024983

Company & Directors' Information:- S K N J INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U74140KA2007PTC042764

Company & Directors' Information:- V P INVESTMENTS PVT LTD [Dormant under section 455] CIN = U65910GJ1981PTC004115

Company & Directors' Information:- A P INVESTMENTS PVT LTD [Dormant under section 455] CIN = U65910GJ1981PTC004116

Company & Directors' Information:- A J INVESTMENTS PVT LTD [Active] CIN = U65910GJ1981PTC004847

Company & Directors' Information:- K J A INVESTMENTS PRIVATE LIMITED [Amalgamated] CIN = U65910GJ1981PTC004849

Company & Directors' Information:- R N V INVESTMENTS PVT LTD [Strike Off] CIN = U65910GJ1982PTC005514

Company & Directors' Information:- D K INVESTMENTS PVT LTD [Strike Off] CIN = U65910GJ1982PTC005518

Company & Directors' Information:- D G R MULTI TRADE PRIVATE LIMITED [Converted to LLP] CIN = U74999MH2015PTC267302

Company & Directors' Information:- C AND M INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65993RJ1995PTC010922

Company & Directors' Information:- V. V. INVESTMENTS PRIVATE LIMITED. [Strike Off] CIN = U65993JK1984PTC000665

Company & Directors' Information:- ACT TRADE-PRIVATE LIMITED [Strike Off] CIN = U74899DL1994PTC058018

Company & Directors' Information:- A R INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U99999MH1978PTC020588

Company & Directors' Information:- R. S. D. INVESTMENTS PVT LTD [Strike Off] CIN = U99999MH1982PTC028731

Company & Directors' Information:- J R B B INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U67120TN1990PTC019840

Company & Directors' Information:- O P INVESTMENTS PVT. LTD. [Strike Off] CIN = U67120HR1995PTC032595

Company & Directors' Information:- U P K INVESTMENTS PVT LTD [Not available for efiling] CIN = U65993WB1974PTC029672

Company & Directors' Information:- B D K INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U99999MH1979PTC021782

Company & Directors' Information:- A M L INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65910GJ1981PTC004180

Company & Directors' Information:- S H P INVESTMENTS PRIVATE LIMITED [Strike Off] CIN = U65910GJ1981PTC004675

Company & Directors' Information:- R D INVESTMENTS PVT LTD [Strike Off] CIN = U65990MH1978PTC020590

Company & Directors' Information:- P P S INVESTMENTS COMPANY. [Strike Off] CIN = U31200GA1978ULL000325

    Decided On, 03 May 2017

    At, Income Tax Appellate Tribunal Mumbai

    By, THE HONOURABLE MR. SHAMIM YAHYA
    By, ACCOUNTANT MEMBER & THE HONOURABLE MR. PAWAN SINGH
    By, JUDICIAL MEMBER

    For the Petitioner: Satish R. Mody, Advocate. For the Respondent: Kailash Kanojiya, Advocate.



Judgment Text

Shamim Yahya, Accountant Member

1. This appeal by the assessee is directed against order of Ld. CIT-A dated 29.11.2013 and pertains to assessment year 2010-11.

2. The grounds of appeal read as under:

1) On facts and circumstances, The Learned Commissioner of Income-tax (Appeals)-5, Mumbai, has erred in holding that the Appellant has not been carrying on any business or has not carried on any activity to revive the business and thereby erred in confirming the order of the Assessing Officer.

Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014

2) On facts and circumstances, The Learned Commissioner of Income-tax (Appeals)-5, Mumbai, has erred in holding that the business is closed whereas the business of the Appellant is to do equity research and to maximize and/or guard against the risk of fluctuations in equity market and thereby erred in not allowing expenditure incurred in payment of salaries, rent, telephones, conveyance etc. which is incurred for carrying on business as Investors and/or traders in shares, securities, mutual funds etc. and has erred in confirming the order of the Assessing Officer.

3) On facts and circumstances, The Learned Commissioner of Income-tax (Appeals)-5, Mumbai, has erred in holding that the Investments of the funds in fixed deposit for a short term, pending decision to invest in shares, securities etc. depending upon market conditions is an "income from other sources" and has erred in not holding that it is an income from business activities.

4) On facts and circumstances, The Learned Commissioner of Income-tax (Appeals)-5, Mumbai, has erred in confirming disallowance of Rs. 93,00,890/- being travelling and salaries paid to staff on the ground that no business is carried on.

5) The Appellant reserves right to add, alter or amend the above grounds of appeal as and when found necessary.

3. The facts are that assessee company has shown income from investment activities such as interest, dividend and gain on sale of shares and Mutual funds. The total income of Rs 1,24,06,953/- there from is credited to the P&L A/c. As against that, the total expenses at Rs 1,32,07,059/- has been debited therein. Accordingly, the loss of Rs 8,00,106/- has been shown.

Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 Before the AO it was pleaded that assessee is registered as Non Banking Non Financial Company with RBI and carried on business of equity research, financing and investing in shares etc. The AO observed that the kind of activity done by the assessee cannot be considered as business activity or NBFC business. The was of the view that the interest income earned on fixed deposits with banks, public debentures with LIC Housing Finance and L&T Finance Ltd, REC Bonds and interest on IT refunds cannot be treated as business income just because assessee company is registered as NBFC with RBI. The AO also observed that when the assessee was not engaged in the business of money lending, the interest income earned by it can be assessed as "income from other sources" only. For that reason the AO assessed the interest income amounting to Rs 29,04,598/- as income from other sources u/s. 56 of the IT Act and held that the deduction there from could be allowed only u/s 57 of the IT Act. The assessee had shown dividend income of Rs 22,16,1281- on FMPs & Equity, gain on sale of shares and Mutual funds of Rs 47,86,055/-. The dividend and long term capital gain have been claimed as exempt. Thus AO held that expenses claimed could also not be covered u/s 48. In the context, by giving detailed reasoning Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 the AO held that the expenses totalling to Rs 1,32,07,059/- claimed by the assessee cannot be allowed as a deduction u/s 48 & Sec. 57 of the IT Act. The assessee had claimed travelling expenses amounting to Rs 6,12,858/- on account of air ticket of Prashant K. Trivedi on his foreign visits. The AO noted that the expense was not allowable because the activities carried out by the assessee was that of investment in shares and units of Mutual funds and interest on FDs; and that the investment activity was also carried out by portfolio management service from the bank. No separate disallowance thereon was however made as the same was part of the disallowance made otherwise. Since the assessee had added back Rs 39,06,169/- suo moto [disallowance u/s 14A], the AO disallowed the balance amount of Rs 93,00,890/- [Rs 1,32,07,059/- minus Rs 39,06,169/-

4. Upon assessee's appeal Ld. CIT-A confirmed the action of the A.O. He held as under:

I have perused the relevant P&L A/c and Balance sheets and taken note of the submissions made by the assessee. I find that the basic activity of the assessee is the investment in shares, capital bonds and Mutual funds. The dividend income thereon stands exempted from tax. The long term capital gain on sale of those investments is also exempted. The short term capital gain is taxed at concessional rates. The income during the year, as credited in the P&L A/c is from interest [Rs Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 29,04,598/-], dividend [Rs 32,16,128/-] and gain on sale of shares and Mutual funds [Rs 47,86,355/-]. No income from trading of any shares have been shown during the year. The Balance sheet reflects the shares held as stock in trade at Rs 76,021 I-only. The same amounts stands reflected in its Balance sheet for A.Y. 2008-09 [i.e as on 31.03.2008]. It is also noted that out of the total share capital and reserves & surplus shown at Rs.33,89,88,239/-, the investments in shares and Mutual funds amounts to Rs.30,26,31,463/-. The goods block [fixed assets] is shows at Rs.31,89,346/-. Thus it is very evident that no business activity has been undertaken by the assessee. The income is mainly from the investment and as such the assessee's plea that its investments in shares as well as fixed deposits are to be considered as its stock in trade is misplaced. The income on sale of shares/Mutual funds itself have been shown by the assessee as capital gain and that itself negates the argument/stand taken by the assessee. This is a case where assessee has deployed competent personnel staff to carry out equity research and after due consideration, the decision is taken for investment in equity shares/ Mutual funds. In between when a study suggests adverse scenario of the market for investment in shares/Mutual funds, the funds are placed in banks as fixed deposits. Therefore, its plea that fixed deposits are also held as stock in trade and investment thereof should be treated as its business activity is also misplaced and cannot be accepted. The AO has rightly rejected such claim of the assessee. The perusal of the P&L A/c further indicates that the major cost debited, to the P&L al c has been on account of employee cost [Rs.91,35,418/-] and other expenses [Rs.36,89,952/-]. The break-up of other cost is given in Schedule 9. That includes the expenses on account of postage & telephone expenses [Rs.2,20,919/-] repairs & maintenance [Rs.83,795/-, printing & stationery [Rs.58,313/-], audit fees [Rs.42,465/- plus Rs.11,030/-], subscription [Rs.7,041/-], vehicle expenses [Rs.1,34,910/-, travelling expenses [Rs.10,97,159/-], professional fees [Rs.5,02,895/-], rent [Rs 9,82,776/-], electricity charges [Rs 2,43,376/-] etc. Thus it is observed that major activity of the assessee is to make investment in equity and Mutual funds based on the Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 professional advice of its own competent personnel who are engaged in devoting their prime time in equity research by obtaining/collecting the relevant information. The expenses shown in Schedule 9 towards other cost mainly relates to such activities. The dividend as well as the long term capital gain is totally exempt thereon. Thus these expenses [employee cost as well as other cost] are with regards to the investment activities only, the income from which stands exempted and thus are to be excluded u/s 14A. Since in the present case there is no business income, the AO has rightly disallowed any such expenses out of the interest income which is taxable under the head "income from other sources". The short term capital gain too has been shown at Rs.9,94,215/-. The deduction there from is allowable u/s 48 of the IT Act. The AO did not give any allowance thereof for the reason that such expenses could not be covered u/s 48 also. In the facts of the case, in my considered view the AO has taken the correct and just view and does not call for any interference.

5. Against the above order assessee is in appeal before us. We have heard both the counsel and perused the records. Ld. Counsel of the assessee submitted that there has only been a temporary lull in the business. He submitted that assessee has shown substantial income in assessment year 2007-08 and 2008-09. No such disallowance was made in those year. He further submitted that subsequently in financial year 2015-16 and 2016-17 the business has substantially picked up. For this purpose he submitted that profit and loss account and balance sheet for financial year 2015-

16. He further submitted that profit and loss account and balance sheet for assessment year 2016-17 are under preparation. For the proposition that when there is a temporary lull in the business, Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 expenditure incurred in the intervening period cannot be disallowed Ld. Counsel of the assessee placed reliance upon the decision of Hon'ble Bombay High Court reported in 83 ITR 1 Karsondas Ranchhoddas Vs. CIT.

6. Upon careful consideration we find that it is the submission of the Ld. Counsel of the assessee that assessee has shown substantial income in assessment year 2007-08 and 2008-09. It is also the submission of the Ld. Counsel of the assessee that there was a temporary lull in the business activity. However he has claimed that subsequently the business has picked up and in financial year 2015- 16 and financial year 2016-17 assessee has shown substantial business income. We note that the balance sheet for the financial year 2015-16 was not

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before the authorities below. Furthermore the submission that there was a temporary lull and the business has subsequently picked up, was also not before the authorities below. However the proposition that when there is a temporary lull in the business, it cannot be said that there is a cessation of business by the assessee, is supported by the decision of Hon'ble High Court decision as cited above. When there is no cessation of business, assessee is engaged in doing business and the business expenditure as appropriate deserves to be allowed. Multi Act Trade & Investments P. Ltd., ITA no.240/Mum./2014 7. However since we note that the additional evidence and the new submissions were not before the authorities below, hence in the interest of justice we remit this issue the file of the A.O. The A.O shall examine the issue afresh in light of the additional submissions of the ld. Counsel of the assessee. Needless to add assessee should be granted adequate opportunity of being heard. Both the counsel fairly agreed with this proposition The result this appeal by the assessee is allowed for statistical purposes.
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