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TMI Blog2022 (11) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee could not have carried on trading activities. Further, notice that the assessee has not brought in fresh funds in order to continue to carry on share trading activities. Under these set of facts, we do not find any merit in the contentions of the assessee and accordingly, we hold that the assessee has not carried on any business activity during the financial year relevant to AY 2008-09. CIT(A) has allowed part of expenses, but it is the contention of the assessee that the CIT(A) has not allowed all relevant expenses, particularly depreciation and other relevant expenses. Hence, the expenses required to be incurred in order to maintain the corporate status, legal expenses and other necessary expenses which are required to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Rajiv Khandelwal And Shri Poojan Mehta For the Department : Shri P. Daniel ORDER Both the appeals filed by the assessee are directed against the orders passed by the learned CIT(A)-49, Mumbai and they relate to A.Y.2008-09 2011-12. Since common issues are urged in these appeals, both the appeals are being disposed of by this common order, for the sake of convenience. 2. In both the appeals the assessee is aggrieved by the decision of the learned CIT(A) in confirming the disallowance of expenses claimed by the assessee on the ground that the assessee has not carried on any business activity during these years. In AY 2008-09, the assessee is aggrieved by the decision of Ld CIT(A) in upholding assessment of interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had revalued its trading stock of shares and securities and claimed the loss arising on such revaluation. The same was also rejected by the AO. When the matter relating to AY 2008-09 reached the Tribunal in the first round, the ITAT restored the matter back to the file of the AO with the following observation:- 5. In this matter, the order of SEBI had attained finality on 18-05-2007 and it is a question of fact to be decided whether there was business in existence till such date and any expenses are allowable as deduction till such date. Since the AO had not examined the said aspect, it has become imperative to examine the question of allowability of various expenses incurred by the assessee till 18-05-2007, in the context of conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. He submitted that the depreciation and all legal expenses claimed by the assessee are related to the maintenance of corporate status of the assessee. He submitted that the assessee had been carrying on various business activities, viz., share broking, merchant banking, share trading and consultancy. He submitted that the SEBI has suspended the share broking and merchant banking activity only, i.e., the business activities relating to share trading and consultancy have not been suspended by SEBI. Accordingly, he submitted that it cannot be said that the business activities of the assessee has completely banned as presumed by the tax authorities. He submitted that the trading stocks of the assessee were attached by the Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of earlier years. Accordingly, he submitted that the assessee cannot change its stand now in the years under consideration. 8. The Ld A.R, in the rejoinder, submitted that the SEBI has barred only share broking and merchant banking activity of the assessee, which is very much clear from the orders passed by various authorities. When only a part of various activities carried on by the assessee is barred, it cannot be said that the entire business activities of the assessee have been barred. He submitted that the co-ordinate bench has not given a decision that the expenses incurred after 18-05-2007 are not allowable. It has only observed that at the most it can be said that no expenses can be allowed from that year . 9. I have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the corporate status as well as legal expenses incurred in contesting various legal cases are required to be allowed. I notice that the revenue has also accepted the principle so expressed by Ld CIT(A). I noticed that the Ld CIT(A) has allowed part of expenses, but it is the contention of the assessee that the Ld CIT(A) has not allowed all relevant expenses, particularly depreciation and other relevant expenses. Hence, I am of the view that the expenses required to be incurred in order to maintain the corporate status, legal expenses and other necessary expenses which are required to be incurred invariably to run the company should be allowed as deduction in the hands of the assessee. Accordingly, I modify the order passed by Ld CIT(A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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