D.C.I.T.CIRCLE 4(2), MUMBAI V. M/S. THE OMNISCIENT SECURITIES P.LTD., MUMBAI

ITA 6479/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2702 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 07-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH: MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V DURGA RAO, JUDICIAL MEMBER ITA NO 6479/MUM/2008 (ASSESSMENT YEAR: 2005-06) DCIT, CIR 4(2), R NO 642, 6TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 VS M/S THE OMNISCIENT SECURITIES P LTD, 1003, R J TOWERS, DALAL STREET, MUMBAI -400 023 PAN: AAACT 7330 D APPELLANT RESPONDENT CROSS OBJECTION 77/MUM/2009 ARISING OUT OF ITA NO 6479/MUM/2008 FOR AY 2005-06 M/S THE OMNISCIENT SECURITIES P LTD, 1003, R J TOWERS, DALAL STREET, MUMBAI -400 023 PAN: AAACT 7330 D VS DCIT, CIR 4(2), R NO 642, 6TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 CROSS OBJECTOR RESPONDENT ASSESSEE CROSS OBJECTOR BY: NONE REVENUE BY: SHRI SANDEEP DAHIYA ORDER PER V DURGA RAO, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT (A)-IV DATED 1.08.2008 FOR ASSESSMENT YEAR 2005-06. THE A SSESSEE HAS FILED FILED CROSS OBJECTIONS. 2. IN THE APPEAL FILED BY THE REVENUE THE ONLY ISSU E INVOLVED IS RELATING TO ALLOWANCE OF DEPRECIATION ON BOMBAY STOCK EXCHANGE MEMBERSHIP CARD. 3. AN IDENTICAL ISSUE WAS CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS TECHNO SHARES & STOCKS LTD (184 TAXM AN 103) WHEREIN HONBLE JURISDICTIONAL HIGH COURT HELD THAT BSE CARD IS NOT A BUSINESS OR COMMERCIAL RIGHT RELATING TO INTELLECTUAL PROPERTY RIGHTS AND DEPREC IATION CANNOT BE ALLOWED ON THE ITA 6479/M/2008 CO 77/MUM/2009 M/S THE OMNISCIENT SECURITIES P LTD 2 SAME. THEREFORE, RESPECTFULLY FOLLOWING THE DECISI ON OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ALLOW THE GROUND FILED BY THE REVENUE. 4. IN SO FAR AS CROSS OBJECTION RAISED BY THE ASSES SEE IS CONCERNED, THE ONLY ISSUE RELATES TO THE DISALLOWANCE OF TRANSACTION CHARGES PAID BY THE ASSESSEE TO THE NATIONAL STOCK EXCHANGE OF INDIA ON THE GROUND THAT THE TRANSACTION CHARGES ARE HIT BY PROVISIONS OF SECTION 40A(IA) R W SECTION 194J O F THE INCOME-TAX ACT, 1961. BOTH THE PARTIES BEFORE US AGREED THAT THE ISSUE UNDER C ONSIDERATION STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF MUMBAI E BENCH OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD VS ACIT (2008) (25 SOT 440) (MUM). 5. WE HAVE HEARD BOTH THE SIDES PERUSED THE MATERIA L ON RECORD. IN THE CASE OF KOTAK SECURITIES LTD VS ACTI (SUPRA) IT HAS BEEN HE LD THAT TRANSACTION FEE PAID TO STOCK EXCHANGE ON THE VOLUME OF TRANSACTION IS PAYM ENT FOR USE OF FACILITIES PROVIDED BY STOCK EXCHANGE AND NOT FOR ANY SERVICES, EITHER TECHNICAL OR MANAGERIAL. HENCE PROVISIONS OF SECTION 194J ARE NOT ATTRACTED AND NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. SINCE THE FACTS IN THE PRESENT CASE ARE SIMILAR, FOLLOWING THE TRIBUNAL ORDER (SUP RA) WE REVERSE THE ORDER PASSED BY THE CIT (A) ON THIS ISSUE AND DIRECT FOR DELETION O F ADDITION ON THIS ACCOUNT. 6. IN THE RESULT, THE REVENUES APPEAL AND ASSESSEE S CROSS OBJECTION ARE ALLOWED. ORDER PRONOUNCED ON 29 TH DAY OF DECEMBER 2009. SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (V DURGA RAO) JUDICIAL MEMBER MUMBAI, DATE: 29 TH DECEMBER 2009 TRUE COPY ITA 6479/M/2008 CO 77/MUM/2009 M/S THE OMNISCIENT SECURITIES P LTD 3 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -IV MUMBAI. 4) THE CIT-4, MUMBAI. 5) THE D.R. E BENCH, ITAT, MUMBAI BY ORDER ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI