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2014 (4) TMI 662 - AT - Income TaxDisallowance of claim for depreciation on BSE and NSE Membership Card Held that:- The decision in JM FINANCIAL SERVICES PVT LTD Versus ADDL COMMISSIONER OF INCOME TAX. MUMBAI [2013 (8) TMI 821 - ITAT MUMBAI] followed - the right of membership (including the right of nomination) vests in the Exchange only when a member commits default - Otherwise, he continues to participate in the trading session on the floor of the Exchange - by virtue of Explanation 3 to Section 32(1)(ii) the commercial or business right which is similar to a "licence" or "franchise" is declared to be an intangible asset - the right of membership, which includes right of nomination, is a "licence" or "akin to a licence" which is one of the items which falls in Section 32(1)(ii) of the Act - The right to participate in the market has an economic and money value - It is an expense incurred by the assessee which satisfies the test of being a "licence" or "any other business or commercial right of similar nature" in terms of Section 32(1)(ii) of the Act Decided in favour of Assessee. Disallowance u/s 14A r.w Rule 8D of the Rules Held that:- A specific dissatisfaction was recorded by the AO in the assessment order regarding the correctness of the disallowance offered by the assessee u/s 14A of the Act and even the reasons for the same were given by the AO - Rule 8-D was not applicable in A.Y. 2007- 08 when the additional disallowance made u/s 14A of the Act - As per Rule 8D, if the AO is not satisfied with the disallowance computed by the assessee u/s 14A of the Act, he can compute the disallowance to be made u/s 14A of the Act by applying the Rule and there is nothing to suggest that either the AO or the CIT(A) is required to point out any specific expenditure incurred for earning the dividend income in order to make a disallowance u/s 14A read with Rule 8-D of the Income tax Rules, 1962 thus, there was no merit in the ground raised by the assessee Decided against Assessee. Disallowance of expenses on lease rent paid for vehicles Claim for depreciation on vehicles and finance charges paid on lease finance assets - Held that:- The decision in JM FINANCIAL SERVICES PVT LTD Versus ADDL COMMISSIONER OF INCOME TAX. MUMBAI [2013 (8) TMI 821 - ITAT MUMBAI] followed - The facts has not been discussed or dealt with by the AO - an appreciation of facts by the CIT(A) has also been disputed - the entire issue is remitted back to the AO for fresh adjudication Decided in favour of Assessee. Disallowance of entrance fees paid to the club for corporate membership Held that:- The decision in CIT vs. Samtel Color Ltd 2009 (1) TMI 26 - DELHI HIGH COURT] followed - the Corporate Membership fee paid to the club was held to be deductible as revenue expenditure u/s 37 of the Act holding that the fact that an expenditure gives enduring benefit is by itself not conclusive as regards the nature of the expenditure - the disallowance on account of entrance fee paid by the assessee for Corporate membership of Cricket Club of India is set aside Decided in favour of Assessee. Computation of rebate u/s 88E of the Act Allocation of indirect expenses Held that:- Assessee was unable to explain any basis on which the indirect expenditure to the extent of Rs. 22,10,259/- was allocated by the assessee to the trading activity - the allocation of indirect expenses towards trading activity as made by the assessee was without any basis and keeping in view of the same as well as other facts of the case, allocation of indirect expenses made by the CIT(A) on estimated basis cannot be disturbed being fair and reasonable thus, there is no need to interfere in the order of the CIT(A) Decided against Assessee.
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