DCIT 3(2), MUMBAI V. PRABHUDAS LILADHER P. LTD, MUMBAI

ITA 6147/MUM/2009

• Counselvise Citation: 614719914 RSA 2009
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 24-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT KUMAR SINHA
• Keywords: Depreciation
• Section: 115JB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI R.S.PADVEKAR (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.6147/M/2009 ASSESSMENT YEAR 2005-06 THE ACIT, CIR.4(2), ROOM NO.642, M/S.PRABHUDAS LI LADHER PVT. LTD. 6 TH FLOOR, AAYAKAR BHAVAN, 915, MAKER CHAMBERS V, M.K.ROAD, MUMBAI 400 020. NARIMAN POINT, MUMBAI 400 021. PAN ; AAACP2733Q APPELLANT RESPONDENT REVENUE BY : SHRI AJIT KUMAR SINHA ASSESSEE BY : NONE O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26.8.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2005-06. THE REVE NUE IN THIS APPEAL HAS RAISED DISPUTES ON TWO DIFFERENT GROUNDS. 1.1 AT THE TIME OF HEARING OF APPEAL NO ONE APPEARE D ON BEHALF OF THE ASSESSEE THOUGH THE NOTICE OF HEARING HAD BEEN GIVE N WELL IN ADVANCE. WE THEREFORE PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DR. 2. THE FIRST DISPUTE IS REGARDING ALLOWABILITY OF D EPRECIATION ON THE BSE MEMBERSHIP CARD. THE ASSESSEE HAD CLAIMED DEPRECIAT ION OF RS.21,16,967/- ON 2 THE BSC MEMBERSHIP CARD WHICH WAS DISALLOWED BY THE AO. IN APPEAL CIT(A) OBSERVED THAT UNDER THE PROVISIONS OF SECTION 32(1) (II) DEPRECIATION WAS ALLOWABLE IN RESPECT OF INTANGIBLE ASSETS LIKE PATE NT, COPY RIGHTS, TRADEMARKS, LICENSES, FRANCHISEES OR ANY OTHER BUSINESS OR COMM ERCIAL RIGHTS. HE ALSO REFERRED TO THE DECISION OF THE TRIBUNAL IN CASE OF TECHNO SHARES AND STOCK LTD. VS ITO (101 TTJ 341) IN WHICH CLAIM OF DEPRECIATION WAS ALLOWED. CIT(A) ACCORDINGLY ALLOWED THE DEPRECIATION ON THE BSC MEM BERSHIP CARD AS CLAIMED BY THE ASSESSEE AGGRIEVED BY WHICH THE REVENUES IS IN APPEAL. 2.1 WE HAVE HEARD THE LEARNED DR, PERUSED THE RECOR DS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEPRECIATION ON THE BSE MEMBERSHIP CARD. UNDER THE PROVISIONS OF SECTIO N 32(1)(II), DEPRECIATION IS ALLOWABLE IN RESPECT OF INTANGIBLE ASSETS LIKE PATE NTS, COPY RIGHTS, TRADEMARKS, LICENSES, FRANCHISES OR ANY OTHER BUSINESS OR COMME RCIAL RIGHTS. HONBLE SUPREME COURT RECENTLY IN CASE OF TECHNO SHARES AND STOCK LTD. (327 ITR 323) HAVE HELD THAT BSE CARD IS AKIN TO THE LICENSE FOR DOING BUSINESS AND THEREFORE SAME IS AN INTANGIBLE ASSET ELIGIBLE FOR ALLOWANCE OF DEPRECIATION UNDER THE PROVISIONS OF SECTION 32(1)(II). THE ORDER OF CIT(A ) ALLOWING DEPRECIATION IS THEREFORE IS IN CONFORMITY WITH THE JUDGMENT OF SUP REME COURT (SUPRA). THE SAME IS THEREFORE UPHELD. 3. THE SECOND DISPUTE IS REGARDING ADJUSTMENT ON AC COUNT OF DEPRECIATION OF BSE CARD AMOUNTING TO RS.21,16,967/- WHILE COMPUTIN G THE BOOK PROFIT UNDER SECTION 115JB OF THE INCOME-TAX ACT. THE AO WHILE C OMPUTING BOOK PROFIT UNDER SECTION 115JB HAS ADDED THE DEPRECIATION OF RS.21,1 6,967/- CLAIMED BY THE ASSESSEE IN RESPECT OF BSE MEMBERSHIP CARD. IN APPE AL CIT(A) OBSERVED THAT WHILE COMPUTING BOOK PROFIT ONLY THE ADJUSTMENTS AS SPECIFIED IN SECTION 115JB 3 COULD BE MADE AND SINCE THERE WAS NO PROVISION FOR ADJUSTMENT ON ACCOUNT OF DEPRECIATION CIT(A) DELETED THE ADDITION MADE BY TH E AO AGGRIEVED BY WHICH THE REVENUE IS IN APPEAL. 3.1 WE HAVE HEARD THE LEARNED DR, PERUSED THE RECOR DS AND CONSIDERED THE MATTER CAREFULLY. THE BOOK PROFIT HAS BEEN DEFINED IN THE EXPLANATION 1 TO SECTION 115JB(2) AS THE NET PROFIT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT PREPARED IN ACCORDANCE WITH THE PROVISIONS OF PART- II AND PART-III OF SCHEDULE VI OF THE COMPANIES ACT AS INCREASED BY THE AMOUNTS SPECIFIED IN THE SAID EXPLANATION. WE AGREE WITH CIT(A) THAT ONLY THE ADD ITIONS AS SPECIFIED IN THE EXPLANATION CAN BE MADE TO THE NET PROFIT WHILE COM PUTING THE BOOK PROFIT. THERE WAS NO PROVISION FOR ANY ADJUSTMENT ON ACCOUN T OF DEPRECIATION IN THE SAID EXPLANATION IN THE ASSESSMENT YEAR 2005-06 UND ER CONSIDERATION. THEREFORE NO ADDITION COULD BE MADE ON ACCOUNT OF C LAIM OF DEPRECIATION WHILE COMPUTING BOOK PROFIT. WE SEE NO INFIRMITY IN THE O RDER OF CIT(A) AND THE SAME IS THEREFORE UPHELD. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. 5. ORDER WAS PRONOUNCED IN THE OPEN COURT 27.04.201 1. SD/- SD/- ( R.S. PADVEKAR ) (RAJEND RA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 27.04.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR C BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK