In your original code:
Multiplication(X,[Head|Tail],Result) :-
Y is X*Head,
append([Result], [Y], L),
append([],L,Result), // HERE
Multiplication(X,Tail,Result).
You're getting a "cycle" because you're appending Result to something to get L, then appending something to L to get Result. That's not good. You also have a capitalized predicate name, which is a syntax error. (I assume that, since you ran your code, it wasn't capitalized in the original version.)
You're new proposed solution is overly complicated. Why do you need the 4th argument? Also, your base case for return (which is return(X, [], Result) doesn't make sense, as it has to singleton variables. The use of append/3 is overkill since recursion handles the iteration through the list elements for you.
Starting from the top, you have a common pattern in Prolog where you want to run a query on corresponding elements of two or more lists. A simple recursive solution would look something like this:
multiplication(_, [], []). % Multiplying anything by the empty list is the empty list
multiplication(M, [X|Xs], [XX|XXs]) :-
XX is M * X,
multiplication(M, Xs, XXs).
Another way to implement this kind of pattern in Prolog is with maplist/3. You can first define the query on corresponding elements:
multiply(X, Y, Product) :- Product is X * Y.
Then use maplist/3:
multiplication(M, List, Result) :-
maplist(multiply(M), List, Result).
Maplist will do a call(multiply(M), ...) on each corresponding pair of elements of List and Result.