GRISHMA SECURITIES P. LTD, MUMBAI V. ITO 4(1)(2), MUMBAI

ITA 6098/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7817 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 06-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Depreciation; Set aside

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI R. V. EASWAR, PRESIDENT AND SHRI RAJEN DRA SINGH(AM) ITA NO.6098/M/2010 ASSESSMENT YEAR 2007-08 M/S. GRISHMA SECURITIES PVT. LTD. THE ITO 4(1)(2) , MUMBAI 92/4, NIRBHAY NIWAS BHAU DAJI CROSS ROAD NO.10 MATUNGA, MUMBAI 400 019. PAN : AABCG1300K APPELLANT RESPONDENT ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI A.K.NAYAK O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 7.6.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE ONLY DISPUTE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING ALLOWABILITY O F DEPRECIATION ON STOCK EXCHANGE CARD. THE ASSESSEE HAD CLAIMED DEPRECIATIO N OF RS.51,85,031/- ON STOCK EXCHANGE CARD @ 25%. THE AO DISALLOWED THE CL AIM OF DEPRECIATION FOLLOWING THE JUDGMENT OF HONBLE HIGH COURT OF MUM BAI IN CASE OF TECHNO SHARES AND STOCK LTD. (323 ITR 69) IN WHICH IT WAS HELD THAT DEPRECIATION WAS NOT ALLOWABLE ON STOCK EXCHANGE CARD UNDER SECTION 32(1)(II) AS IT WAS NOT A BUSINESS OR COMMERCIAL ASSET RELATABLE TO INTELLECT UAL PROPERTY. IN APPEAL CIT(A) CONFIRMED THE ORDER OF AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2 2. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEPRECIATION ON A STOCK EXCHANGE CARD. UNDER THE PROVISIONS OF SECTION 32(1 )(II) DEPRECIATION IS ALLOWABLE ON CERTAIN INTANGIBLE ASSETS SUCH AS KNOW HOW, PATENTS, COPY RIGHTS AND LICENSE ETC. EARLIER THE HONBLE HIGH COURT OF MUMBAI IN CASE OF TECHNO SHARES AND STOCK LTD. (SUPRA) HAD HELD THAT STOCK E XCHANGE CARD WAS NOT COVERED UNDER SECTION 32(1)(II) AND THEREFORE DEPRE CIATION WAS NOT ALLOWABLE. HOWEVER THE SAID JUDGMENT OF THE BOMBAY HIGH COURT HAS RECENTLY BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN THE SAME CASE AND IT WAS HELD THAT STOCK EXCHANGE CARD IS AKIN TO A LICENSE AND THEREF ORE IT IS COVERED UNDER SECTION 32(1)(II) AND DEPRECIATION IS ALLOWABLE. WE THEREFORE RESPECTFULLY FOLLOWING THE SAID JUDGMENT OF HONBLE SUPREME COUR T, SET ASIDE THE ORDER OF CIT(A) AND ALLOWED THE CLAIM OF THE ASSESSEE. 3. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. 4. ORDER WAS PRONOUNCED IN THE OPEN COURT 29.03.201 1. SD/- SD/- ( R. V. EASWAR ) (RAJENDR A SINGH) PRESIDENT ACCOUNTANT MEMBER DATE : 29.03.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR G BENCH, ITAT, MUMBAI // TRUE COPY// 3 BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK