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TMI Blog2018 (1) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation is to be allowed on such assets. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of invoking the provisions of section 147 of the act by the Assessing Officer igoring the fact that the claim disallowed was already considered and allowed in the original assessment and for a mere change in opinion the provisions of section 147 of the act could not have been invoked. 5. The learned Commissioner of Income Tax (Appeals) erred in not following the ratios laid down in the decisions of the Hon'ble Supreme Court in CIT Vs. (i) Kelvinator of India Ltd (ii) Eicher Ltd (2010) 320 ITR 561 (SC), wherein it is held that, for a mere change in opinion, the provisions of section 147 of the act cannot be invoked. 6. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that, the re-opening U/s. 147 of the act was not valid and therefore the consequential assessment should have been annulled. At the outset, the Ld. AR has not seriously objected the ground of reopening contained in ground nos.4 to 6, and left it to be adjudicated by the bench. 03. The CIT (A) in para 4 has reproduced the statement of fact and obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings, it was submitted to the Assessing Officer that the claim was made in the original return filed and in the depreciation schedule the following note was specifically written justifying the claim. "Note: Depreciation at 25% on stock exchange cards, is claimed on the basis of ITAT order in the case of Techno Shares and Stock Ltd, vide ITA No. 778, 779 & 1951/Mum/2004 and ITA No. 4885/MUM/2005. As no depreciation was claimed in the earlier years the cost is taken as written down value and is shown as addition." Further during the course of hearing the Assessing Officer sought for clarifications in regard to allowability of depreciation on the cards above. Clarifications were furnished vide letter dated 27.08.2008. After considering the details furnished and also the clarifications the assessment was concluded U/s. 143(3) of the act on 30.12.2008 & 15.09.2009 accepting the claim. It was submitted to the Assessing Officer that, since while concluding the first assessment the claim has been considered and decision taken, on a change of opinion the provisions of section 147 of the act could not have been invoked. It was further submitted to the Assessing Officer tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was strictly confined to the right of membership conferred by the BSE membership card only. 05. We have gone through the record and heard the rival contentions. Considering the written submissions filled before us and the reasons given by the AO for reopening, that the assessee has claimed the depreciation on stock exchange membership cards considering them as intangible assets. However, the said investment qua membership of NSE and BGSE shown in Schedule VI of P&L account where it has not been shown as fixed asset. However the assessee for the first time has claimed the depreciation on the said cards. Hitherto the assessee has not claimed depreciation though the certificate of registration was granted to the assessee with respect to BGSE on 01.10.2001 and with respect to NSE, the same was granted on 09.09.2009 as per duplicate certificate. Further, we have looked into the order of assessment for the respective assessment years, where we find that there was no description on the allowance or disallowance of the depreciation on these investments. For ready reference, we are reproducing herein below the order passed u/s.143(3) on 30.12.2008, which is as under : The assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 147 (Kerala)] On the basis of the above, it was submitted that the depreciation is required to be allowed on the WDV of these stock exchange membership cards. It was submitted that the rules and regulations dealing with BGSE and NSE as that of BGSE card, as held by the Hon'ble Supreme Court in Techno Shares & Stocks Ltd v. CIT [(2010) 327 ITR 323]. 08. On the other hand, the Ld. DR has submitted that the judgment of the Hon'ble Supreme Court was on the facts of that case and the Hon'ble Supreme Court has interpreted the rules and regulations as prevailing on the date of claim of depreciation. Our attention was drawn to the following paragraph : We wish to clarify that our present judgment is strictly confined to the right of membership conferred upon the member under the BGSE membership card during the relevant assessment years. We hold that the said right of membership is a "business or commercial right" which gives a non-defaulting continuing member a right to access the exchange and to participate therein and in that sense it is a licence or akin to licence in terms of section 32(1)(ii) of the 1961 Act. That, such a right vests i the exchange only on default / demise in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he BGSE as they stood during the relevant assessment years. Keeping the above said observation of the Hon'ble Supreme Court, the bench has directed the assessee to produce the rules and bye-laws of NSE as well as of the BGSE, pertaining to the category of membership of the assessee, as applicable to the assessment year 2006-07 and 2007-08. As directed by the Tribunal, the assessee filed some extracts of the NSE / BGSE rules. On a perusal of the NSE literature filed on record, we notice that there are the following four categories of memberships : i) Corporate entities ii) Limited Liability partnership iii) Partnership iv) Individuals Thus there are following categories of normal memberships available i) Cash segment ii) Future option segment iii) Currency derivatives segment iv) Debt segment The type of membership is trading membership, trading cum self clearing membership, trading cum clearing member. 12. Under the Alpha membership, the following description is given: 13. The eligible criteria for the partnership firm, LLP and corporate company institution is given, and then the other eligibility criteria are mentioned as under : BMC Requirement SEBI vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of NSE and what were the rules applicable at that point of time. In the absence of these information it is difficult to decide the issues based only on Judgment of Hon'ble Supreme Court. 17. Similarly, the assessee has placed at page 26, the certificate of registration in respect of BGSE, dt.01.10.2001, but the assessee has not only failed to provide the details of the consideration paid for acquiring this registration from BGSE but also the assessee has not provided the rules and regulations that are applicable at the time of issuance of certificate as well as at the time of claiming depreciation ie., AYs. 2006-07 and 2007-08. Further we may notice that in the aBGSEnce of relevant rules and regulations for the relevant years under consideration and the rules and regulations at the time of acquisition of membership, it is not possible to conclude whether the privilege which the assessee was having are similar to that of the privilege as available to BGSE membership during that period. In our view in the absence of this information, it is not possible for the bench to conclude anything for or against the assessee. 18. Further the assessee in Schedule VI claimed the same investme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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