TMI Blog2011 (8) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 ₹ 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 very short period for realizing dividend. These transactions were in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly 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 contended that the legal position as it is stood on the date on which trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 ₹ 20,10,331 b. Entertainment ₹ 1,12,196 c. Maintenance charges ₹ 2,9,699 d. Legal and profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , etc. The other expenditures are incurred for the purpose of business. The explanation of the assessee did not find favour by the Assessing Officer. The AO was of the view that as per the records made available 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantiation or justification of domestic or foreign travel expenses. Similarly in respect of professional expenses, the AO has fully explained that the AR could not furnish the exact nature of professional 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 mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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