Navkar Share & Stock Brokers Pvt. Ltd., Ahmedabad V. The ACIT., Circle-3, Ahmedabad

ITA 1823/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8990 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 18-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice; Cost of acquisition
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 201

Judgement Text

ITA NO. 1823 / AHD/201 1 ASSESSMENT Y EAR: 20 08 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 1823 /AHD/201 1 ASSESSMENT Y EAR : 20 08 - 09 NAVKAR SHARES & STOCK BROKER PVT. LTD., ..... .......... .APPELLANT 3, VIMLA COMPLE X, OLD SHARDA MANDIR ROAD, ELLISBRIDGE, AHMEDABAD. [PAN: AABC N 0385 P ] VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 3, AHMEDABAD. .. ......... RESPONDENT APPEARANCES BY TUSHAR P. HEMANI FOR THE A PPELLANT JAMES KURIAN FOR THE R E SPONDENT HEARING CONCLUDED ON: 1 1 .01.2017 ORDER PRONOUNCED ON : 28 .03.2017 O R D E R PER PRAMOD KUMAR , AM: 1. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 24 TH JUNE, 2011, PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT U NDER SECTION 143(3) OF THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 20 08 - 09 . 2. GRIEVANCES RAISED BY THE A SSESSEE ARE AS FOLLOWS : - 1 THE L D. CIT(A ) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ACTION OF LD . AO IN DISALLOWING DEPRE CIATION OF RS.34,10,156/ - CLAIMED U/S 32(1)(II) OF THE ACT ON THE TRADING RIGHT OF BOMBAY STOCK EXCHANGE LIMITED. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN NOT FOLLOWING THE ORDER OF THE HON BLE ITAT PASSED BY DISMISSING THE APPE AL OF THE DEPARTMENT FOR IMMEDIATE PRECEDING YEAR I.E. A . Y . 2007 - 08 ON THE SAME ITA NO. 1823 / AHD/201 1 ASSESSMENT Y EAR: 20 08 - 09 PAGE 2 OF 3 ISSUE IN OWN CASE OF THE APPELLANT AND ACCORDINGLY ALLOWING THE LEGITIMATE CLAIM OF THE APPELLANT, WHICH IS JURISDICTION ORDER AND BINDING IN NATURE. 3. THE LD. CIT ( A ) HAS E RRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING T HE ACTION OF LD . AO IN INVOKING PROVISIONS OF S.55(2)(AB) OF THE ACT TO DETERMINE THE COST OF ACQUISITION OF TRADING RIGHT OF BOMBAY STOCK EXCHANGE LIMITED WHICH IS NOT PERMISSIBLE AS PER THE SCHEME OF THE ACT. 4. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN PASSING THE ORDERS WITHOUT PROPERLY APPRECIATING THE FACT AND THAT HE FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPELLAN T FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF BOTH THE AUTHORITIES IS IN CLEAR BREACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVE S TO BE QUASHED. 5. THE LEARNED CIT (A) HAS ER RED IN LAW AND ON FACTS OF THE CASE IN NOT ADJUDICATING THE G R OUND RAISED IN APPEAL AGAINST THE ACTION OF THE LD. AO IN LEVYING INTEREST U/S 234B/C OF THE ACT. 6. THE LEARNED C IT(A) HAS ER R ED IN LAW AND ON FACTS OF T HE CASE IN NOT ADJUDICATING THE GROUND RAISED IN APPEAL AGAINST THE ACTION OF THE LD. AO IN INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF T HE ACT. 3. AS EVIDENT FROM THE ABOVE GROUNDS, WHICH ARE IN THE NATURE OF LEGAL ARGUMENTS IN SUPPORT OF ASSESSEE S GRIEVANCE, SHORT GRIEVANCE OF THE AS SESSEE IS AGAINST LEARNED CIT( A ) S UPHOLDING THE DISALLOWANCE OF DEPRECIATION OF RS.34,10,156/ - , CLAIMED UNDER SECTION 32(1)(II) OF THE ACT , ON STOCK EXCHANGE MEMBERSHIP CARD. 4. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL F ACTS NEED TO BE TAKEN NOTE OF. THERE IS NO DISPUTE THAT THE ASSESSEE WAS GRANTED DEPRECIATION ON STOCK EXCHANGE MEMBERSHIP CARD IN T HE IMMEDIATELY PRECEDING ASSESSMENT YEAR, AND, THEREFORE, THE MEMBERSHIP CARD DID BECOME PART OF THE BLOCK OF ASSETS. IN THE PRESENT YEAR, HOWEVER, THE ASSESSING O FFICER DID NOT GRANT DEPRECIATION ON THE GROUND THAT A FTER IMPLEMENTATION OF CORPORATISATION AND DEMUTUALISATION SCHEME 2005, SUCH MEMBERSHIP CARD STOOD CANCELLED AND EQUITY SHARES WERE ALLOTTED IN LIEU OF THE SAME, COST OF WHICH, AS PER PRO VISO TO SECTION 55(2) (AB), IS TO BE DEEMED AS NIL. AGGRIEVED, ASSESSEE CARRIED THE ITA NO. 1823 / AHD/201 1 ASSESSMENT Y EAR: 20 08 - 09 PAGE 3 OF 3 MATTER IN APPEAL BEFORE THE LEARNED CI T(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTION S , PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. WE FIND THAT, AS IS THE SETTLED LEGAL POSITION, ONCE AN ASSET ENTERS THE BLOCK OF ASSETS, IT LOSES IT S INDIVIDUAL IDENTITY . S UBSEQUE NTLY , EVEN IF SOMETHING HAPPENS TO INDIVIDUAL ASSET, THE ASSESSEE IS NEVERTHELESS ELIGIBLE FOR DEPRECIATION IN RESPECT OF THAT BLOCK OF ASSET. THAT IS WHAT HON BLE JURISDICTIONAL HIGH COURT HAS HELD IN THE CA SE OF DEEPAK NITRITE LIMITED VS. DCIT (T . A . NO . 429 OF 2017; JUDGEMENT DATED 18.12.2014). RESPECTFULLY FOLLOWING THE S AME, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE. THE ASSESSING O FFICER IS, ACCORDINGLY, DIRECTED TO DELETE THE IMPUGNED DISALLOWANCE. HAVING DECIDED THE MATTER ON THIS SHORT LEGAL GROUND , WE SEE NO NEED TO DEAL WITH OTHER ISSUES RAISED BEFORE US. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH , 2017 . S D/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 28 TH DAY OF MARCH , 201 7 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASS ISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD