ITO 2(1)(1), MUMBAI V. AMIT CAPITAL & SECURITIES P.LTD, MUMBAI

ITA 2531/MUM/2010

• Counselvise Citation: 253119914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Keywords: Unexplained cash credit; Business income; Revenue expenditure
• Section: 143(3); 68

Judgement Text

1 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI R.K. PAND A, A.M. ITA NO. 2531/MUM/2010 ASSESSMENT YEAR 2006-07 I.T.O. 2(1)(1), AAYAKAR BHAWAN, ROOM NO. 575, 5 TH FLOOR, MUMBAI -400 020. VS. M/S AMIT CAPITAL & SECURITIES P. LTD., 3 RD FLOOR, J.K. SOMANI BUILDING, B.S. MARG, FORT, MUMBAI 400023. PAN AAACA 4219 Q APPELLANT RESPONDENT APPELLANT BY SHRI P.C. MAURYA RESPONDENT BY SHRI VIJAY MEHTA DATE OF HEARING 21.7.2011 DATE OF PRONOUNCEMENT 21.9.2011 ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DT. 4.1.2010 OF THE CIT(A)- 4, MUMBAI RELATING TO A.Y. 2006-07. 2. GROUNDS OF APPEAL NO. 1 & 5 BEING GENERAL IN NAT URE ARE DISMISSED. 3. GROUND NO. 2 READS AS UNDER:- ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT AN AMOUNT OF ` 36,55,466/- REPRESENTING UNEXPLAINED CASH CREDITS AND ADDED BY THE A.O. U/S 68 IS NOT TAXABLE. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT AS PER THE BALANC E SHEET OF M/S ANAND 2 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. RATHI DIRECT INDIA (P) LTD., THEY HAVE SHOWN TO HAV E BORROWED AN AMOUNT OF ` 67,10,870/- FROM THE ASSESSEE. HOWEVER, THE LEDGER A/C OF THE ASSESSEE SHOWS IN THEIR BOOKS A DEBIT AND EQUAL AMOUNT OF CREDIT O F ` 1,03,65,949/- ON VARIOUS DATES DURING THE YEAR. THE ASSESSEE HAS NOT CLARIF IED THE DIFFERENCE AND THE DISCREPANCY WITH THE FIGURES DISCLOSED IN THE TAX A UDIT REPORT. ACCORDINGLY, THE A.O. ADDED THE ENTIRE DIFFERENCE OF ` 36,55,466/- AS UNEXPLAINED CASH CREDIT U/S 68 AS UNDER:- SR NO. NAME OF THE PARTY AMT AS PER TAX AUDIT REPORT AMT OF TRANSACTION AS PER LEDGER LOAN GIVEN AS PER LEDGER LOAN TAKEN AS PER LEDGER DIFFERENCE (4-3) DIFFERENCE [4-(5+6)] 1 AMIT CAPITAL & SECURITIES PVT. LTD. 67,10,483 1,03,65,949 22,38,014 6710483 36,55,466 14,17,452 3.1 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT NO DISCREPANCIES IN THE BOOKS OF ACCOUNTS WERE FOUND BY THE ASSESSING OFFICER. HE NCE IT CANNOT BE SAID AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. IT WAS SUBMIT TED THAT THE DISCREPANCIES OBSERVED BY THE A.O. IS ON ACCOUNT OF DIFFERENCE BE TWEEN THE FIGURES AS REPORTED IN TAX AUDIT REPORT UNDER CLAUSE 24(A) & (B) OF THE ANNEXURE VS. AGGREGATE FIGURES IN ACCOUNT COPIES OF LOAN PARTIES. THE CLAU SE 24(A) & (B) OF STATEMENT OF PARTICULARS OF FORM 3CD ANNEXED TO THE TAX AUDIT RE PORT IS REQUIRED TO GIVE THE REPORT ON TRANSACTIONS OF LOAN ACCEPTED AND REP AID BY THE ASSESSEE. THERE IS NO REQUIREMENT OF REPORTING ON LOAN GIVEN UNDER THE CLAUSE 24(A) & (B) OF TAX AUDIT REPORT. THE ASSESSEE COMPANY IS A PART OF GRO UP COMPANIES OF M/S ANAND RATHI GROUP WHICH FREQUENTLY BORROWED FROM AN D LENT FUNDS TO EACH OTHER WITHIN THE ALLOWED LEGAL FRAME WORK. IN THE I NSTANT CASE THE ASSESSEE HAD FIRST GIVEN THE LOAN AND DURING THE LAST QUARTER OF THE YEAR, IT HAS ACCEPTED THE LOAN FROM THE SAME PARTY WHICH WAS REPAID BEFORE TH E END OF THE YEAR AND THEREFORE THE LOAN WHICH HAS BEEN TAKEN/ACCEPTED BY THE ASSESSEE IS ONLY REQUIRED TO BE REPORTED BUT THE INCOME TAX OFFICER HAS WRONGLY COMPARED THE 3 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. AGGREGATE FIGURE I.E. LOAN TAKEN AND LOAN GIVEN AND THEN DIFFERENCE OF BOTH HAS BEEN TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE AC T WHICH IS NOT CORRECT. 3.2 BASED ON THE ARGUMENTS ADVANCED BEFORE HIM, THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER:- I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND I FIND THAT THE A.O. IS NOT JUSTIFIED IN MAKING THE ADDITI ON U/S 68. AS PER THE TAX AUDIT REPORT IN CLAUSE 24(A) AND (B) THE AU DITORS ARE REQUIRED TO REPORT ON THE AMOUNT OF LOAN OUTSTANDING ON THE BALANCE SHEET DATE. THE AUDITOR WOULD NATURALLY GIVE THE BALANCE OF THE FIGURE OF LOAN TAKEN. THIS AMOUNT IS ARRIVED ONLY AFTER SETT LING THE DEBIT BALANCES IN THE PARTYS ACCOUNT. THE A.O. IS NOT J USTIFIED IN TAKING THE ENTIRE TRANSACTION DURING THE YEAR AND THEN ADD ING THE DIFFERENCE WITH THE BALANCE OF THE FIGURE WITH UNEXPLAINED CAS H CREDIT. THE A.R. HAS FILED THE ACCOUNT COPIES OF THE PARTIES WHOSE L OANS ARE BEING SHOWN AS OUTSTANDING. FROM THE ACCOUNT COPIES IT I S EVIDENT THAT THE AUDITORS HAVE REPORTED THE BALANCE FIGURE AT THE YE AR END WHEREAS THE A.O. HAS TAKEN THE ENTIRE TRANSACTION DURING TH E YEAR AND ARRIVED AT THE DIFFERENCE FROM THE BALANCE OF THE LOAN ACCO UNT WHICH IS NOT CORRECT. NO ADDITION CAN BE SUSTAINED AS THERE IS NO DIFFERENCE IN THE ACCOUNT COPIES OF THE PARTY WHOSE LOANS ARE BEING S HOWN BY THE ASSESSEE AS OUTSTANDING. THE A.O. IS DIRECTED TO D ELETE THIS ADDITION. THIS GROUND OF APPEAL IS ALLOWED. 3.3 AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), TH E REVENUE IS IN APPEAL BEFORE US. 3.4 WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. AN ANALYSIS OF THE LEDGER ACCOUNT OF M/S ANAND RATHI DIRECT INDIA PVT. LTD. IN THE BOOKS OF THE ASSESSEE (PAPER BOOK PAGE 15) SHOWS THAT THE ASSESSEE HAS GIVEN LOAN OF ` 67,10,483/- DURING THE YEAR AND HAS TAKEN ` 22,38,014/-. THE MAXIMUM OUTSTANDING AT ANY POINT OF TIME IS ` 17,05,533/- I.E. ON 13.02.2006. THE LEDGER ACCOUNT OF M/S ANAND RATHI DIRECT INDIA PVT. LTD. IN THE BOOKS OF THE ASSESSEE (PAPER BOOK PAGE 13 & 14) SHOWS THE GROSS TOTAL OF DEBIT AT ` 1,03,65,949/- AND GROSS TOTAL CREDIT OF EQUAL AMOU NT FOR THE YEAR ENDING 31.3.2006. THE ABOVE AMOUNT TALLIES WI TH THE FIGURES SHOWN IN THE BOOKS OF ACCOUNT OF ANAND RATHI DIRECT (I) PVT. LTD . THE FINDING OF THE LD. CIT(A) 4 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. THAT THE A.O. IS NOT JUSTIFIED IN TAKING THE ENTIRE TRANSACTION DURING THE YEAR AND THEN ADDING THE DIFFERENCE WITH THE BALANCE OF THE FIGURE AS UNEXPLAINED CASH CREDIT COULD NOT BE CONTROVERTED BY THE LD. D .R. FURTHER, THE FINDING OF THE LD. CIT(A) THAT THE AUDITORS HAVE REPORTED THE BALANCE FIGURE AT THE YEAREND WHEREAS THE A.O. HAS TAKEN THE ENTIRE TRANSACTION D URING THE YEAR AND ARRIVED AT THE DIFFERENCE FROM THE BALANCE OF THE LOAN ACCO UNT ALSO COULD NOT BE CONTROVERTED BY THE LD. D.R. SINCE THERE IS NO DIF FERENCE IN THE ACCOUNT COPIES OF THE PARTY WHOSE LOANS ARE BEING SHOWN BY THE ASS ESSEE AS OUTSTANDING AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION IS THEREFORE UPHELD. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 4. GROUND OF APPEAL NO. 3 BY THE REVENUE READS AS U NDER:- ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT AN AMOUNT OF ` 44,77,300/- REPRESENTING PROFIT ON SALE OF SHARES IS TAXABLE UNDER THE HEAD LTCG INSTEAD OF PROFITS AND GAINS OF BUSINESS AS FOUND BY THE A.O. AND OVERLOOKING THE FACT THAT THE ONLY BUSINESS ACTIVITY OF THE ASS ESSEE CONSISTED OF PURCHASE AND SALE OF SHARES. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS SHOWN INDEXED PROFIT AS INCOME FROM CAPITAL GAIN WHEREAS IN THE PROFIT AND LOSS A/C. BOOK PROFIT WAS SHOWN AS INCOME FROM SALE OF SHARES AND THE SAID LO NG TERM CAPITAL GAIN ON QUOTED SHARES WERE CLAIMED AS EXEMPT U/S 10(38) OF THE I.T. ACT. THE LONG TERM CAPITAL GAIN ON UNQUOTED EQUITY SHARES WERE OF FERED FOR TAX AT SPECIAL RATE. THE A.O. FURTHER NOTED THAT THE ASSESSEE HAS FILED TAX AUDIT REPORT WHICH IS FILED ONLY WHEN THE ASSESSEE IS DOING BUSINESS AND THE TURNOVER EXCEEDS ` 40 LAKH. THEREFORE, THE A.O. CAME TO THE CONCLUSION T HAT THE ASSESSEE IS DOING BUSINESS OF PURCHASE AND SALE OF SECURITIES. HE RE LIED ON CBDT INSTRUCTION NO. 1827 DATED 31.8.89 AND CIRCULAR NO. 149/287/2005 TP WHICH PRESCRIBE THE 5 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. VARIOUS GUIDELINES TO ASCERTAIN WHETHER THE ASSESSE E IS DOING BUSINESS OR OBTAINING CAPITAL GAIN. THESE TESTS ACCORDING TO T HE A.O. ARE AS UNDER:- (I) WHETHER THE PURCHASE AND SALE OF SECURITIES WAS ALLIED TO HIS USUAL TRADE OF BUSINESS/WAS INCIDENTAL TO IT OR WAS AN OC CASIONAL INDEPENDENT ACTIVITY. (II) WHETHER THE PURCHASE IS MADE SOLELY WITH THE I NTENTION OF RESALE AT A PROFIT OF FOR LONG TERM APPRECIATION AND OR FOR E ARNING DIVIDENDS AND INTEREST. (III) WHETHER SCALE OF ACTIVITY IS SUBSTANTIAL. (IV) WHETHER TRANSACTIONS WERE ENTERED INTO CONTINU OUSLY AND REGULARLY DURING THE ASSESSMENT YEAR. (V) WHETHER PURCHASES ARE MADE OUT OF OWN FUNDS OR BORROWINGS. (VI) THE STATED OBJECTS IN THE MEMORANDUM AND ARTIC LES OF ASSOCIATION IN THE CASE OF A CORPORATE ASSESSEE. (VII) TYPICAL HOLDING PERIOD FOR SECURITIES BOUGHT AND SOLD. (VIII) RATIO OF SALES TO PURCHASES AND HOLDINGS. (IX) THE TIME DEVOTED TO THE ACTIVITY AND THE EXTEN T TO WHICH IT IS THE MEANS OF LIVELIHOOD. (X) THE CHARACTERIZATION OF SECURITIES IN THE BOOKS OF ACCOUNT AND IN BALANCE SHEET AS STOCK IN TRADE ON INVESTMENTS. (XI) WHETHER THE SECURITIES PURCHASED OR SOLD ARE L ISTED OR UNLISTED. (XII) WHETHER INVESTMENT IS IN SISTER/RELATED CONCE RNS OR INDEPENDENT COMPANIES. (VIII) WHETHER TRANSACTION IS BY PROMOTERS OF THE C OMPANY. (XIV) TOTAL NUMBER OF STOCKS DEALT IN. (XV) WHETHER MONEY HAS BEEN PAID OR RECEIVED OR WHE THER THESE ARE ONLY BOOK ENTRIES. 6 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. 5.1 REJECTING THE VARIOUS EXPLANATIONS OFFERED BY T HE ASSESSEE, THE A.O. TREATED THE PROFIT ON SALE OF SHARES AT ` 44,77,300/- AS BUSINESS INCOME. 5.2 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT TH E A.O. IS NOT JUSTIFIED IN TREATING THE LONG TERM CAPITAL GAIN SHOWN BY THE AS SESSEE AS BUSINESS INCOME OF THE ASSESSEE COMPANY. IT WAS SUBMITTED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF ` 45,77,300/- AND HENCE AS A MEASURE OF ABUNDANT CAUTION, THE ASSESSEE FILED TAX AUDIT REPORT ALONG WITH THE RETURN OF INCOME AND, THEREFORE, IT IS NOT CORRECT TO SAY THAT THE A SSESSEE IS DOING BUSINESS IN SECURITIES. IT WAS SUBMITTED THAT THE SHARES OF UN LISTED PRIVATE COMPANIES WERE PURCHASED BETWEEN 1993-94 TO 2003-04. THESE SHARES HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS INVESTMENTS. AN ASSESSEE CAN HAVE BOTH INVESTMENTS AS WELL AS BUSINESS IN SHARES AND SECUR ITIES AS ENVISAGED IN CBDT CIRCULAR NO. 665 DATED 5/10/93. THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF CIT VS. MADAN GOPAL RADHELAL 73 ITR 652 (SC) AND THE DECISION OF BANGALORE ITAT IN THE CASE OF KARNATAKA STATE INDUS TRIAL DEVELOPMENT CORPORATION VS. DCIT AS REPORTED IN 59 ITD 643 (BAN G.) WERE BROUGHT TO THE NOTICE OF THE LD. CIT(A). IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT ENTERED INTO THE SAID TRANSACTIONS FREQUENTLY. THE SHARES WERE PURCHASED AND SOLD WITHIN THE SPAN OF 2 TO 6 YEARS. HENCE, IT CAN NOT BE SAID THAT THE ASSESSEE IS DOING BUSINESS IN SECURITIES. 5.3 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER:- I HAVE DULY CONSIDERED THE SUBMISSION OF THE A.R. A ND I FIND THAT THE SHARES WERE PURCHASED LONG BACK IN 1993-94 TO 2003- 04. THE SHARES WERE CONTINUOUSLY SHOWN BY THE ASSESSEE AS I NVESTMENT IN THE BOOKS OF ACCOUNT. HENCE, IT CANNOT BE SAID THA T THE ASSESSEE HAS CONDUCTED BUSINESS IN SHARES AND SECURITIES. THE A.O. IS NOT JUSTIFIED IN TREATING THE SALE OF SHARES AS BUSINES S INCOME OF THE ASSESSEE AS THE ASSESSEE HAS RIGHTLY SHOWN THEM AS LONG TERM CAPITAL GAIN. THE A.O. IS DIRECTED TO DELETE THIS ADDITION . 7 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. 5.4 AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 5.5 WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS D ECISIONS CITED BEFORE US. FROM THE COPY OF THE ASSESSMENT ORDER FOR A.Y. 2005 -06 PASSED U/S 143(3) OF THE I.T. ACT ON 26.12.07 (COPY OF WHICH IS PLACED A T PAGE NO. 32 & 33) WE FIND THE A.O. HAS ACCEPTED THE SHORT TERM CAPITAL GAIN OF ` 4,54,270/- AND LONG TERM CAPITAL GAIN OF ` 1,16,967/-. THE FINDING OF THE LD. CIT(A) THAT TH E SHARES WERE PURCHASED LONG BACK I.E. DURING YEAR 1993-94 TO 2003-04 AND SHARES WERE CONTINUOUSLY SHOWN BY THE ASSESSEE AS INVESTME NT IN THE BOOKS OF ACCOUNT COULD NOT BE CONTROVERTED BY THE LD. D.R. UNDER THESE CIRCUMSTANCES, MERELY BECAUSE THE ASSESSEE, AS A PRECAUTIONARY MEA SURE, HAD FILED TAX AUDIT REPORT BECAUSE THE LONG TERM CAPITAL GAIN HAS CROSS ED ` 40 LACS, THE SAME IN OUR OPINION, CANNOT BE A GROUND TO TREAT THE ASSESS EE AS A TRADER. IN THIS VIEW OF THE MATTER WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF THE LD. CIT(A) TREATING THE PROFIT IN SALE OF SHARE AS LONG TERM CAPITAL GA IN AS AGAINST BUSINESS INCOME DETERMINED BY THE A.O. THE GROUND RAISED BY THE REV ENUE IS ACCORDINGLY DISMISSED. 6. GROUNDS OF APPEAL NO. 4 BY THE REVENUE READS AS UNDER:- ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF ` 13,99,521/- AND ` 6221/- PERTAINING RESPECTIVELY TO ADMINISTRATIVE EXPENSES AND STT, DESPITE THE FACT THAT THE CLAIM FOR DEDUCTION OF THESE EXPE NSES HAVE NOT BEEN SUBSTANTIATED AND ACCORDING TO THE ASSESSEES CLAIM , THE INCOME CONSISTED OF CAPITAL GAIN ONLY. 6.1. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. DISALL OWED THE ENTIRE ADMINISTRATIVE AND OTHER EXPENSES OF ` 13,99,521/- AND STT OF ` 6221/- BY TREATING THE CAPITAL GAIN AS BUSINESS INCOME AND MA KING ADDITIONS UNDER THE HEAD OTHER SOURCES. HE REJECTED THE CLAIM OF THE ASSESSEE THAT THE SAME WERE 8 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. GENUINELY INCURRED DURING THE COURSE OF CONDUCT OF THE BUSINESS OF COMPANY. SINCE ALL THE ADDITIONS MADE BY THE A.O WERE DELETE D AND DECIDED IN FAVOUR OF THE ASSESSEE, THE LD. CIT(A) DIRECTED THE A.O. TO C OMPUTE THE INCOME AS PER RETURNED INCOME BY ALLOWING ALL EXPENSES AS CLAIMED BY ASSESSEE. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. ADMITTEDLY, THE A.O. IN THE SCRUTINY ASSESSMENT ORDER FOR A.Y. 2005-06 HAS ACCEPTED THE EXPENDITURE OF ` 9466/- AND ALLOWED THE SAME. HOWEVER, DURING THE YEAR THE TOTAL EXPENDITURE HAS GONE UP TO ` 13,99,521/- WHICH INCLUDES SALARY AND ALLOWANCE OF ` 13,37,196/-. FURTHER, THE ASSESSEE DURING THE IMPUGNED A.Y. HAS PURCHASED THE BOMBAY S TOCK EXCHANGE CARD AT A COST OF ` 65,10,000/-. UNDER THESE CIRCUMSTANCES, THE ENTIRE EXPENDITURE, IN OUR OPINION, CANNOT BE ALLOWED AS EXPENDITURE FOR E ARNING LONG TERM CAPITAL GAIN. HOWEVER, TO MAINTAIN THE CORPORATE STATUS OF THE ASSESSEE, IT MAY REQUIRE TO SPEND SOME EXPENDITURE. WE, THEREFORE, FIND MER IT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE A.O. WITH A DIRECTION TO ALLOW REASONABLE EXPENDITU RE WHICH MAY BE ALLOWED AS REVENUE EXPENDITURE. ACCORDINGLY, WE RESTORE THIS I SSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO DETERMINE SUCH REASONABLE EXPEN DITURE AND ALLOW THE SAME AS REVENUE IN NATURE. THE GROUND RAISED BY THE REVE NUE IS ACCORDINGLY PARTLY ALLOWED FOR STATISTICAL PURPOSE. 9 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 21.9.2011. SD/- SD/- (N.V. VASUDEVAN) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 21.9.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) V, MUMBAI 4. THE CIT MC V, MUMBAI 5. THE DR BENCH, E 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 10 ITA 2531/ M/10, AMIT CAPITAL & SECURITIESP.LTD.. DATE INITIALS 1 DRAFT DICTATED ON 30.8.11, 5.9.11,19.9.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 2.9.2011, 5.9.11,19.9.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER