ACIT, CHENNAI V. M/s/ DBS Cholamandalam Securities Ltd., CHENNAI

ITA 229/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5197 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIVAS
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER .. ITA NO.229/MDS./2010 ASSESSMENT YEAR: 2005-2006 ASST. COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-I(4), CHENNAI 600 034. VS. M/S.DBS CHOLAMANDALAM SECURITIES LTD., NO.2, NSC BOSE ROAD, CHENNAI-1. PAN :AABCC 5958 R (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI B.SRINIVAS ASSESSEE BY : SHRI SAROJKUMAR PARIDA O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-III AT CHENNAI DATED 27.11.2009 IN ITA NO.1 99/07- 08/A.III. 2. THE REVENUE HAS TAKEN THREE GROUNDS OF APPEAL A ND THE SOLE ISSUE INVOLVED IN ALL THE GROUNDS OF APPEAL IS THAT THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEPRECIATION ON STOCK EXCHANGE MEMBERSHIP CARD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO DIS ALLOWED DEPRECIATION OF RS.18,78,662/- CLAIMED BY THE ASSES SEE ON PAGE OF 5 ITA.229 /MDS/10 M/S.DBS CHOLAMANDALAM SECURITIES LTD A.Y. 2005-06 2 STOCK EXCHANGE MEMBERSHIP CARD ON THE GROUND THAT T HE STOCK EXCHANGE MEMBERSHIP CARD CANNOT BE TREATED AS AN IN TANGIBLE ASSET ELIGIBLE FOR DEPRECIATION AND ALSO ON THE GRO UND THAT THE CLAIM FOR DEPRECIATION ALLOWED BY THE CHENNAI BENC H OF THE TRIBUNAL TO THE ASSESSEE IN ASSESSMENT YEAR 2002-20 03 IN ITA NO.2245/MDS/05 ORDER DT.09.02.07 IN ASSESSEES OWN CASE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE DEPARTM ENT HAS FILED AN APPEAL BEFORE THE HONBLE MADRAS HIGH COUR T AGAINST THE SAID ORDER OF THE TRIBUNAL. 4. ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON STOCK EXCHANGE MEMBERSHIP CARD FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2001-02 AND 2003-04 IN ITA NOS.1993 AND 1994/MDS/2006 DATE D 20.03.2008 IN ASSESSEES OWN CASE WHEREIN TRIBUNAL HELD AS UNDER:- THE FACTS ARE BEING IDENTICAL AND TO BE CONSISTENT WITH THE DECISIONS OF THE ITAT,CHENNAI IN ASSESSEES OWN CASE AS WELL AS ITAT, MUMBAI BENCH, WE HAVE NO HESITATION TO ALLOW THE CLAIM OF DEPRECIATION ALLOW ANCE ON THE STOCK EXCHANGE MEMBERSHIP CARD. SINCE THE FACTS ARE IDENTICAL, RESPECTFULLY FOLLOWING THE ABO VE DECISIONS, THE GROUND OF APPELLANT IS ALLOWED. 5. AT THE TIME OF HEARING, THE AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE SUBMITTED THAT THE ISSUED NOW STANDS C OVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF TECHNO SHARES AND STOCKS LTD. VS. CIT REPORTED IN [2010] 327 ITR 323 (SC). PAGE OF 5 ITA.229 /MDS/10 M/S.DBS CHOLAMANDALAM SECURITIES LTD A.Y. 2005-06 3 6. THE DEPARTMENTAL REPRESENTATIVE AGREED WITH SUBMISSION MADE BY THE LEARNED AUTHORIZED REPRESENT ATIVE OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS A VAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED DEDUCTION OF RS.18,78,622/- AS DEPRECIATION ON STOCK EXCHANG E MEMBERSHIP CARD. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE ISSUE OF CLAIM OF DEPRECIATION ON STOCK EX CHANGE MEMBERSHIP CARD HAS BEEN DECIDED BY THE CHENNAI BEN CH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN FAVOUR OF TH E ASSESSEE FOR THE ASSESSMENT YEAR 2002-2003. THE ASSESSING O FFICER HOWEVER DID NOT ACCEPT THE SUBMISSION OF THE ASSESS EE FOR THE REASON THAT DEPARTMENT HAS FILED FURTHER APPEAL BEF ORE THE HONBLE MADRAS HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL AND ALSO FOR THE REASON THAT THE STOCK EX CHANGE MEMBERSHIP CARD CANNOT BE TREATED AS AN INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION. ON FURTHER APPEAL BY TH E ASSESSEE, THE CIT(A) ALLOWED THE CLAIM FOR DEPRECIATION ON ST OCK EXCHANGE MEMBERSHIP CARD TO THE ASSESSEE FOLLOWING THE ORDERS OF THE CHENNAI BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2001-02 AND 2003-04 IN THE CASE OF THE ASSESSEE ITSELF. THE DEPARTMENTAL REPRESENTATIVE C OULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT THE ORDERS OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2001-02 & 2003-2004 WAS RE VERSED IN APPEAL BY A HIGHER FORUM. PAGE OF 5 ITA.229 /MDS/10 M/S.DBS CHOLAMANDALAM SECURITIES LTD A.Y. 2005-06 4 THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL OF THE REVENUE AND HENCE, THEY ARE DISMISSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 2 ND MAY, 2010. SD/- SD/- ( HARI OM MARATHA ) ( N.S.SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 2 ND MAY, 2011. KSS COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE PAGE OF 5 ITA.229 /MDS/10 M/S.DBS CHOLAMANDALAM SECURITIES LTD A.Y. 2005-06 5 DATE INITIALS 1. DRAFT DICTATED ON 02.05.2011 2. DRAFT PLACED BEFORE AUTHORITY 02.05.2011 3. DRAFT PLACED BEFORE THE 02.05.2011 SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S. 6. KEEP FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER