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2018 (1) TMI 683 - AT - Income TaxReopening of assessment - assessee has claimed the depreciation on stock exchange membership cards considering them as intangible assets - Held that:- The issue of depreciation has neither been considered by the AO nor any question was raised nor any adjudication has taken place in this regard. There was no occasion for the AO to form an opinion. In our view, the situation before us clearly falls within the four corners of Section 147 r.w.s.148, as the assessee has failed to disclose all the material facts necessary for assessment and therefore the case of the assessee falls within the proviso to Section 147 of the Act. In view thereof, there is no illegality or irregularity in the order passed by the AO for reopening the case It is beyond cavil that the block assets included intangible assets, licences, franchises or any other business or commercial rights of similar nature. The assessee in Schedule VI claimed the same investment, whereas now the assessee is claiming depreciation by treating the investment as fixed assets. It is to be analysed by the AO if the assessee was claiming it to be a fixed asset, then what was the value of acquisition at the time of acquiring the membership and how the WDV of the assets have been worked out after its acquisition and also whether the assessee after acquiring it as investment has claimed any expenditure / deduction / claim against the said acquisition or not. We remand the matter to the file of the AO to adjudicate after consider the following : i) The date of acquisition of the membership with NSE / BGSE ii) The consideration, if any, for which the membership was acquired iii) What were the rights of the members of the stock exchange as per the rules and regulations prevalent at the time of acquisition and at the time of claim of depreciation iv) Whether the assessee has claimed any expenditure / deduction / claim etc., on the investment made in NSE / BGSE membership cards v) Effect of the decisions of the Mumbai Tribunal in Pavak Securities P. Ltd (2013 (9) TMI 608 - ITAT MUMBAI) and Sino Securities P. Ltd (2011 (11) TMI 535 - ITAT MUMBAI) vi) Whether the rules and regulations of BGSE / NSE relevant for the impugned assessment years were similar to the rules and bye-laws of BGSE for the assessment year involved in the judgment of Techno Shares & Stocks Ltd (2006 (1) TMI 236 - ITAT of Mumbai). Appeals of the assessee are allowed for statistical purpose.
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