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TMI Blog2013 (11) TMI 1638X X X X Extracts X X X X X X X X Extracts X X X X ..... gain on sale of shares of BSE which were acquired by assessee under Scheme of Demutualization on Corporatization of Bombay Stock Exchange. 3. Relevant facts are that assessee is a Member of BSE. The assessee-company claimed depreciation on stock exchange card, before the Membership rights of Bombay Stock Exchange (BSE) got demutualized in the assessment year 2006-07 after corporatization of the Bombay Stock Exchange. Under the scheme of demutualization on corporatization of the Bombay Stock Exchange, the assessee got 10000 shares of Bombay Stock Exchange Ltd. (BSEL) of face value of Rs. 1 each. In the assessment year under consideration the assessee sold 9123 shares of BSE Ltd on which it has earned Long Term Capital Gain (LTCG). The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of ld. CIT(A) and submitted that the assessee was entitled to claim depreciation on the BSE Card. He further submitted that as per the provisions of section 55(2)(a) of the Act, the shares allotted under scheme of demutualization on corporatization of the BSE as approved by SEBI shall be the cost of the acquisition of the original cost of membership card of exchange. He submitted that the order of ld. CIT(A) is justified. 7. We have carefully considered the submissions of ld. Representatives of the parties and the orders of authorities below. There is no dispute to the fact that the assessee had claimed depreciation on the BSE Card till BSE was demutualised as per the scheme of "Corporatization' and 'Demutualization' as approved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee in the assessment year under consideration has sold 9123 shares. Therefore, proportionate cost of WDV of BSE card has to be assigned to the said shares while computing the LTCG. We are of the considered view that the AO has rightly computed LTCG by considering the cost of shares taking into account the WDV of the stock exchange card. Similar issue has been considered by ITAT, Mumbai Bench in the case of M/s Pavak Securities Pvt. Ltd. V/s ITO in I.T.A. No.1803/Mum/2012(AY:2008-09) order dated 13.9.2013, to which one of us is a party (JM) and has held that WDV of the stock exchange card has to be taken into consideration while considering cost of shares allotted to the erstwhile members on corporatization of BSE . The abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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