TMI Blog2015 (10) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... e funds, therefore the disallowance of interest part is not justified in the light oN the judgement of Hon'ble Apex Court rendered in the case of Munjal Sales Corporation vs. CIT reported at (2008 (2) TMI 19 - Supreme Court), decision of Torrent Financiers vs. ACIT [2001 (6) TMI 165 - ITAT AHMEDABAD-A] and CIT vs. Reliance Utilities & Power Ltd. reported at (2009 (1) TMI 4 - HIGH COURT BOMBAY) . Therefore, we direct the AO to delete the addition made on the interest expenses. - Decided in favour of assessee. Disallowance of depreciation on the membership of the Stock Exchange - Held that:- Under the provisions of section 32(1)(ii) depreciation is allowable on certain intangible assets such as know how, patents, copy rights and license e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case, the CIT(A) erred in upholding disallowance of depreciation o the membership of the Stock Exchange which enables the assessee to Key-in the transactions on the Screen Based Platform of the Stock Exchange. 3. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 2. Briefly stated facts are that the assessee filed its return of income declaring income of ₹ 11,56,61,350/-. The case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 29/12/2008, thereby the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities below. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the decisions relied upon by the ld.counsel for the assessee. The contention of the assessee is that interest income of ₹ 7.54 crores is more than the total interest outgo of ₹ 2.29 crores and thus there is net interest income of ₹ 5.25 crores. Therefore, it cannot be said that the assessee has claimed any expenditure on interest. This is so because in assessee's case there is a common pool of interest income and interest outgo. The AO invoked the provisions of section 14A of the Act on the basis that the assessee has shown dividend income of ₹ 1,25,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nwards. In this case, the assessment year involved is 2006-07, therefore the disallowance of administrative expenses is not justified. Hence, the AO is directed to delete the addition of ₹ 50,000/- as sustained by the ld.CIT(A). 5.1. In respect of the disallowance on interest portion, the ld.counsel for the assessee has drawn out attention towards balance-sheet, wherein the assessee has sufficient interest-free funds for making investments into the assets from which the assessee has earned exempt income. Since the assessee was having sufficient interest-free funds, therefore the disallowance of interest part is not justified in the light o the judgement of Hon'ble Apex Court rendered in the case of Munjal Sales Corporation vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no value is evident from the provisions of proviso to section 55(2)(ab) of the Act which has been brought on a statue by the Finance Act 2003 w.e.f. 01/04/2004. In present case under consideration, it is admitted fact that the assessee has been allotted equity shares under the BSE corporatization and Demutulization Scheme 2005 and same is evident from the balance sheet where under the head investment of ₹ 10000 equity shares of BSE limited has been reflected. Once the assessee has been allotted equity shares of BSE limited under scheme then as per provisions of section 55(2)(ab), the cost of acquisition of trading and clearing right shall be deemed to be NIL hence depreciation cannot be allowed. Considering the same, disallowance m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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