TMI Blog2010 (1) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... ount paid is loss, it is a business loss and hence the claim of the assessee should be allowed. - ITA No. 3071/Mum/2008, ITA No. 2903/Mum/2008, - - - Dated:- 28-1-2010 - J. Sudhakar Reddy, V. Durga Rao, JJ. Keshav Saxena for the Appellant M.M. Golwala and Akram Khan for the Respondent ORDER J. Sudhakar Reddy:- 1. These two cross appeals had been directed against the order of the Commissioner of Income-tax (Appeals)-IV dated 11.2.2008 for assessment year 1999-2000. The cross objection is filed by the assessee. 2. The facts in brief are that the assessee is a company and is engaged in the business of share and stock broking and share trading. The assessee-company originally filed its return of income for the assessment year 1999-2000 on 31.12.1999 declaring total income at Rs.3,27,44,310. The return was dully processed u/s.143(1)(a) without any adjustment. Subsequently the assessee filed revised return on 27.03.2001 declaring total income at Rs.3,12,75,560. In this revised return the assessee claimed depreciation on BSE membership card of Rs.14,68,750, the same was not claimed in the original return of income. The Assessing Officer issued notice u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the date of the reopening, there were a number of decisions of the ITAT, which have held that the assessee is entitled to depreciation on Bombay Stock Exchange membership card. He submitted that the judgement in the case of Techno Share and Stock Limited, was a subsequent decision and thus the reasons cited by the Assessing Officer did not exist as on the date of reopening. His case is that the Assessing Officer cannot come to a conclusion that income has escaped assessment, by taking a view that it is against the proposition of law laid down by the jurisdictional Tribunal as on date of recording the reasons for re-opening. Thus he argued that the reopening is bad in law. Coming to ground no.4, he submitted that the facts are at page 19 of the paper book and that the assessee has given an initial advance of 30% for development of software "Credence Midas pride". He pointed out that from the bill itself it is clear that it was only an advance of 30% which was paid. The software was for back office operation of the Primary Dealership Division. As the assessee was dissatisfied with the software as it could not be satisfactorily integrated with its existing system, the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... card. This reason for reopening, in our considered opinion, is a bonafide reason for reopening, despite the fact that the Tribunal has taken the decision in the case of Techno Shares and Stocks Limited that the assessee is entitled to depreciation on BSE card. The fact is that the Revenue has not accepted the order and carried the matter in appeal. In such a situation it cannot be said that there is no valid reason to believe that income has escaped assessment. When the Revenue is agitating an issue before the High Court, the reasons for filing the appeal can also be a reason for reopening of an assessment. The Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Broking Ltd. [291 ITR 500 (SC)] has dealt with the issue and as rightly pointed out by the first appellate authority, it had held that formation of belief is within the subjective satisfaction of the A.O. This reason cannot be treated as one which a reasonable person would not take. In fact the Jurisdictional High Court has upheld the view of the A.O. The reopening was within 4 years and there is no order passed u/s 143(3). The reason recorded is a possible reason and can be said to be a reason which can lead to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to business promotion expenditure. The assessee in this case submitted that the bill in question was raised by the President Hotel in the name of Tata Finance Limited and not in the name of the assessee-company. It was pointed out that both Tata Finance Limited, which is a holding company and the assessee-company operates from same premises i.e. Dubash House, Bellard Estate, Mumbai and by oversight the President Hotel raised the bill wrongly in the name of Tata Finance Limited. The bill was addressed to Mr.Kiran Umrootkar, who is the Director of the assessee-company and had no connection with Tata Finance Limited. This mistake was later rectified by the hotel. In the first appeal, the first appellate authority allowed the claim of the assessee and directed the Assessing Officer to allow expenditure amounting to Rs.2,06,813. We do not find any infirmity in the order of the CIT(A), Thus, we dismiss this ground of the Revenue. 13. Ground no.3 is on the issue whether the first appellate authority was right in allowing diminution in the value of investment of Rs.14,39,384. After hearing the rival contentions we find that the assessee had purchased 17% MTNL Bonds at Rs.106.50 per bon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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