M/s Steel City Securities Ltd., Visakhapatnam V. The ACIT, Range-4, Visakhapatnam

MA 217/VIZ/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6094 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T L PETER
• Keywords: Depreciation

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER M.A. NO. 217/VIZAG/2010 (ARISING OUT OF ITA NO. 378/VIZAG/2010 ) ASSESSMENT YEAR: 2005-06 M/S STEEL CITY SECURITIES LTD., VISAKHAPATNAM VS. ADDITIONAL COMMISSIONER OF INCOME TAX RANGE-4 VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO. AAECS 0970 L APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: SHRI T.L. PETER, DR ORDER PER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS PETITION SEEKING RECTI FICATION OF ORDER DATED 27-8-2010 PASSED IN ITS HAND FOR THE ASSESSMENT YEA R 2005-06 IN THE APPEAL CITED ABOVE WITH THE PLEA THAT THE ISSUE OF DEPRECI ATION ON MEMBERSHIP CARD OF STOCK EXCHANGE HAS SINCE BEEN SETTLED BY HON'BLE SUPREME COURT IN THE CASE OF TECHNO SHARES & STOCKS LTD., & OTHERS VS. C IT (2010) 327 ITR 323) AND THE SAME HAS TO BE FOLLOWED BY THE BENCH IN THE INSTANT CASE ALSO. 2. DURING THE COURSE OF HEARING OF THE PETITION, TH E LEARNED AUTHORISED REPRESENTATIVE PLACED A COPY OF THE ORDER OF THE AP EX COURT CITED ABOVE AND REITERATED THE CONTENTIONS MADE IN THE PETITION. T HE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THE FACTUAL ASPECT O F THE MATTER. WE HAVE GONE THROUGH THE ORDER OF THE HON'BLE APEX COURT AN D NOTICE THAT THE HON'BLE APEX COURT HAS REVERSED THE ORDER OF THE HON'BLE BO MBAY HIGH COURT IN THE PAGE 2 OF 3 CASE OF TECHNO SHARES AND STOCKS LTD. (323 ITR 69) AND HAS HELD THAT DEPRECIATION IS ALLOWABLE ON THE MEMBERSHIP CARD OF A STOCK EXCHANGE. WE NOTICE THAT THE BENCH, BY FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT CITED ABOVE, HAS HELD THAT DEPRECIATION IS NO T ALLOWABLE ON THE MEMBERSHIP CARD OF A STOCK EXCHANGE. IN VIEW OF TH E DECISION OF HON'BLE SUPREME COURT CITED ABOVE, A MISTAKE AS CREPT IN TH E ORDER OF THE TRIBUNAL WHICH NEEDS TO BE RECTIFIED. ACCORDINGLY, WE SUBST ITUTE THE FOLLOWING PARAGRAPHS IN THE PLACE OF PARAGRAPHS NO.4 & 5 OF O RDER DATED 27-8-2010 IN THE HANDS OF THE ASSESSEE IN ITA NO.378/VIZAG/2010. 4. THE NEXT ISSUE RELATES TO THE ALLOWABILITY OF D EPRECIATION ON THE BSE MEMBERSHIP CARD. THE CLAIM OF DEPRECIATION ON THE BSE MEMBERSHIP CARD WAS DISALLOWED BY THE ASSESSING OFF ICER. IN THE APPEAL PREFERRED BY THE ASSESSEE, LEARNED CIT (A) A LLOWED THE CLAIM OF DEPRECIATION BY PLACING RELIANCE ON THE DE CISION OF HON'BLE I.T.A.T. COCHIN IN THE CASE OF PENINSULAR CA PITAL MARKET LTD (ITA NO.190(COCH)/2005 AND 245(COCH)/2006. NOW THE REVENUE IS CONTESTING THE SAID DECISION BY PLACING RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. TECHNO SHARES AND STOCKS LTD (323 ITR 69; 225 CTR 3 37). 5. HOWEVER IT WAS BROUGHT TO OUR NOTICE THAT THE D ECISION OF THE BOMBAY HIGH COURT IN THE ABOVE CITED CASE HAS SINCE BEEN REVERSED BY THE HON'BLE SUPREME COURT IN THE CASE O F TECHNO SHARES & STOCKS LTD., & OTHERS VS. CIT REPORTED IN 2010 (327 ITR 323), WHEREIN IT HAS BEEN HELD THAT THE RIGHT OF ME MBERSHIP IN A STOCK EXCHANGE IS A LICENCE OR AKIN TO LICENCE WHIC H IS ONE OF THE ITEMS FALLING IN SEC.32(1)(II) AND HENCE DEPRECIATI ON IS ALLOWABLE ON THE COST OF THE MEMBERSHIP CARD. THUS WE NOTICE THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE APEX COURT IN THE CASE CITED ABOVE AND THE DECISION OF PAGE 3 OF 3 LEARNED CIT(A) IS IN TUNE WITH THE ORDER OF THE HON 'BLE APEX COURT. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEA RNED CIT (A) ON THIS ISSUE. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ACCORDINGLY, THE MISCELLANEOUS APPLICATION OF THE A SSESSEE IS DISPOSED OF. 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED. PRONOUNCED ACCORDINGLY ON 4 TH JANUARY, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 04-01-2011. COPY TO 1 M/S STEEL CITY SECURITIES LTD., 49-52-5/4 SRI KAN YA TOWERS, SANTHIPURAM, VISAKHAPATNAM 2 THE ADDL. CIT, RANGE-4, VISAKHAPATNAM 3 THE CIT-2 VISAKHAPATNAM 4 THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM