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2022 (5) TMI 266 - AT - Income TaxDisallowance of depreciation on WDV of “BSE Membership Card” - HELD THAT:- As decided in own case [2012 (2) TMI 718 - ITAT MUMBAI] sections which are for the computation of capital gains, have no relevance on the allowability of depreciation. The argument of the assessee that it had taken the original cost of the share © 1, while computing capital gain in a latter year, does not effect our decision. Thus, we uphold the order the Assessing Officer as confirmed by the Commissioner (Appeals) wherein depreciation on membership card has been denied. Computation of capital gain - applicability of provisions of section 55(2)(ab) of the Act as per which cost of acquisition of membership rights of the exchange is deemed to be the cost of shares received on demutualization - While computing the capital gains arisen on sale of shares of Bombay stock exchange rate, the cost of acquisition on membership rates of the exchange as cost of shares sold. Since Assessing Officer charged long term capital gain on sale of BSE shares @20% - HELD THAT:- This issue under consideration is covered in favour of the assessee in the case of M/s.Techno Shares & Stocks Ltd. [2019 (8) TMI 1770 - ITAT MUMBAI] hold that the cost of acquisition of shares of BSE Ltd. shall be the original cost of acquisition of membership card in terms of Section 55(2)(ab) of the Act even though assessee has claimed depreciation on the cost of membership card in the earlier years. As regards the period of holding of shares of BSE Ltd., find that as per clause (ha) inserted in Explanation 1 to Section 2(42A) of the Act by the Finance Act, 2003, period for which the person was a member of the recognised stock exchange in India immediately prior to such demutualisation or corporatisation shall also be included in period of holding of shares. In terms of the clear and unambiguous language of the section, hold that the period of holding of shares of BSE Ltd. shall be reckoned from the date of original membership of BSE and not from date of allotment of shares in BSE Ltd. We thus, agree with the view taken by the learned Judicial Member that the cost of shares will be original cost of the membership card in terms of Section 55(2)(ab) of the Act. - Decided in favour of assessee.
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