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TMI Blog2015 (8) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... y are being disposed of by this common order, for the sake of convenience. 2. In the assessment year 2007-08, the following issues are urged by the assessee: a) Disallowance of Foreign Travelling expenses; and b) Assessment of Short Term Capital Gains (STCG) as business income. 2.1 In the assessment year 2008-09, the following issues are urged by the assessee: a) Assessment of Short Term Capital Gains (STCG) as business income; and b) Disallowances made under section 14A of the Act. 3. Facts of the case are stated in brief. The assessee company is engaged in the business of providing consultancy services in the field of private placement of shares to foreign institutional investors, financial institutions. It is also engaged in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Rule 8D of the Income Tax Rules, 1962 and the same worked out to Rs. 13.57 lakhs. The AO disallowed the above said amount u/s 14A of the Act. 6. In the appellate proceeding, the ld. CIT(A) confirmed the assessment of STCG as business income of the assessee. He also confirmed the disallowance of foreign travelling expenses accepting the order of AO that it is capital in nature. With regard to the disallowance made under section 14A of the Act in assessment year 2008-09, the ld. CIT(A) restored the matter to the file of the AO with a direction to re-work the disallowance in the light of discussion made by him. Aggrieved by the order of the ld. CIT(A), the assessee has filed these appeals before us. 7. We heard the parties and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in shares. However, the fact remains that the assessee itself has offered gains arising on shares held as trading stock as its business income. The assessee has claimed the gains arising on sale of Adani Enterprises Limited only as Short term Capital gain with the claim that it has held the same as its investment. It is now well settled proposition that a person is entitled to maintain two separate portfolios, one for its investment and another one for its trading assets. For this proposition, one may gainfully refer to the Circular No.4/2007 dated 15-06-2007 issued by the CBDT and also the decision rendered by Hon'ble Bombay High Court in the case of Gopal Purohit (2010)(228 CTR 582). In the instant case, the assessing officer has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the assessee is engaged in the business of providing consultancy services in private placement of shares with Foreign Institutional Investors, financial institutes and is also providing advice on strategic investments and insurance sector. Besides the above, it also helps in arranging finance. Now the submission of the assessee is that it has incurred foreign travel expenses to expand its operations in various other places. Mere expansion of existing business activities, under no circumstances, would fall under the category of "New business venture". It is not the case of the AO that the assessee has incurred the foreign travel expenses in connection with any activity, which is altogether new one and unconnected with the existin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are viz., M/s Balaji Telefilms Ltd. The various criteria discussed in the immediately preceding year with regard to the investment made in M/s Adani Enterprises Ltd are equally applicable to the investment made in M/s Balaji Telefilms Ltd, i. E., except one case of repetition of small magnitude, there is no repetition of purchase and sale. The assessee has accumulated the shares initially in instalments and later sold them in instalments. As in last year, no interest bearing funds have been used and average holding period is about 180 days. The assessee has held the same as its investment. The assessee has declared the gains under the head business in respect of shares held as trading asset. All these factors support the contention of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee under the head "Administrative expenses" are as given below:- Brokerage paid on sale of painting 2,02,000 Donation 5,00,000 Legal & Professional fee 7,50,562 Maintenance expenses 1,13,879 Travelling expenses 2,36,402 18,02,843 The assessee has disallowed donation expenses of Rs. 5,00,000/- and maintenance expenses of Rs. 1,13,879/- on its own while computing the total income. The brokerage of Rs. 2,02,000/- paid on sale of painting is a direct expenditure incurred in connection with some other activity. It is submitted that the profit earned on sale of painting was offered to tax. The legal and professional fee was paid to Vatsala K towards advising for real estate deal with M/s K. V. Property venture ..... X X X X Extracts X X X X X X X X Extracts X X X X
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