M/s. Innovate Derivative Pvt. Ltd., Ahmedabad V. The Dy.CIT., Crcle-3, Ahmedabad

ITA 1820/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9334 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 18-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANAM VAKIL
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.1820/AHD/2015 / ASSTT. YEAR: 2007-2008 M/S.INNOVATE DERIVATIVE P.LTD. 2 ND FLOOR, DEVANSHISH 39, SARDAR PATEL NAGAR ROAD NR.NEST HOTEL, ELLISBRIDGE AHMEDABAD 380 006. PAN : AABCI 4706 M VS DY.CIT, CIR.3 AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI MANAM VAKIL, AR REVENUE BY : SHRI PRAJNA PARAMITA, SR.DR / DATE OF HEARING : 15/02/2016 / DATE OF PRONOUNCEMENT: 16/02/2016 $%/ O R D E R THIS APPEAL OF THE ASSESSEE AROSE FROM ORDER OF THE LD.CIT(A)-10, AHMEDABAD PASSED FOR THE ASSTT.YEAR 2007-2008 DATED 27.2.2015. 2. THE ISSUE IN THE GROUNDS OF APPEAL RAISED IS WHE THER ADMISSION PAID TO THE STOCK EXCHANGE IS REVENUE EXPENDITURE OR CAPITA L EXPENDITURE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D PAID RS.5.00 LAKHS TO NATIONAL COMMODITY AND DERIVATIVE EXCHANGE (NCDEX A ND RS.1.00 LAKH TO NATIONAL MULTI COMMODITY EXCHANGE LTD. (NMCE) AS AD MISSION FEE AND CLAIMED THE SAME AS REVENUE EXPENDITURE, WHICH WAS DISALLOWED BY AO. THE ACTION OF THE AO WAS CONFIRMED BY THE LD.FIRST APPE LLATE AUTHORITY. ITA NO.1820/AHD/2015 2 4. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE F ACTS OF THE CASE. THE LD.COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISIO N OF DELHI BENCH OF THE ITAT IN ITA NO.3617/DEL/2012 DATED 31.10.2012 IN TH E CASE OF M/S.KRISHNA COMMODITIES VS. DCIT ON THE IDENTICAL ISSUE, WHERE, IT HAS BEEN HELD THAT ADMISSION FEE PAID BY THE ASSESSEE IN RESPECT OF TH REE EXCHANGES VIZ. MCX, NCDEX AND NMCE WERE NECESSARY EXPENDITURE WHICH HAD GIVEN THE ASSESSEE A RIGHT TO CARRY ON THE BUSINESS AS BROKER . THE PAYMENTS WERE NECESSARY FOR THE ASSESSEE TO CARRY ON BUSINESS. B Y BECOMING A MEMBER, THE ASSESSEE BECAME ENTITLED TO THE BENEFIT OF USING AL L THE FACILITIES OF STOCK EXCHANGE AND ASSESSEE DID NOT BECOME OWNER OF ANY O F THE ASSETS OF THE STOCK EXCHANGE. IT CANNOT BE SAID THAT ANY ENDURING BENE FIT HAD ACCRUED TO THE ASSESSEE. NO NEW ASSET HAS BEEN CREATED AND THERE IS NO INCREASE IN THE PROFIT MAKING APPARATUS OF THE ASSESSEE. THE PAYMENT OF A DMISSION FEE IS LIKE A LICENSE FEE AND IT IS PAID ONLY FOR CARRYING ON THE BUSINESS. ACCORDINGLY, THE DELHI TRIBUNAL, IN THAT CASE, TREATED THE ADMISSION FEE PAID BY THE ASSESSEE TO THE STOCK EXCHANGE AS REVENUE EXPENDITURE. SIMILAR LY, MUMBAI BENCH OF THE ITAT IN THE CASE OF M/S.TOTAL SECURITIES LTD. VS. D CIT IN ITA NO.7123/MUM/08 DATED 31.12.2010 HAS DECIDED THE ISS UE IN ASSESSEES FAVOUR. FOLLOWING THE DECISIONS OF THE ITAT CITED SUPRA, ON THE IDENTICAL ISSUE, I DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECT THE AO TO TREAT SUCH EXPENDITURE AS REVENUE EXPENDITURE, AND ACCORD INGLY, REVERSE THE ORDER OF THE LD.CIT(A). THUS, THE SOLE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 16 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 16/02/2016