LIBRA HOLDINGS P. LTD, MUMBAI v. ITO 4(3)(3), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI. BEFORE SHRI R.V. EASWAR SENIOR VICE-PRESIDENT AND SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER. I.T.A. NO. 6 819/MUM/2008. ASSESSMENT YEAR : 2006-07. LIBRA HOLDINGS P. LTD. THE INCOME TAX OFFICER 6 JYOTI 287 SION ROAD VS. 4(3)(3) MUMBAI. SION (E) MUMBAI-400022. PAN AAACL6478N APPELLANT RESPONDENT APPELLANT BY : NONE.. RESPONDENT BY : SHRI VIKRAM GAUR. O R D E R PER J. SUDHAKAR REDDY A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-XIV MUMBAI DATED 12 TH SEPT. 2008 FOR ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS : I. YOUR APPELLANTS SUBMIT THAT THE LEARNED ASSESSING O FFICER ERRED IN DISALLOWING A SUM OF RS.32 50 000/- TOWARD S CLAIM FOR DEPRECIATION WITH RESPECT TO THE B.S.E. CARD. Y OUR APPELLANT FURTHER SUBMIT THAT THE LEARNED COMMISSIO NER OF INCOME TAX (A)-XIV UPHELD THE ORDER OF THE ASSESSIN G OFFICER. II. YOUR APPELLANTS SUBMIT THAT THE LEARNED ASSESSING O FFICER ERRED IN DISALLOWING UNDER SECTION 40(A)(IA) SUM OF RS.2 46 988/- PAID FOR VSAT CHARGES AND STOCK EXCHA NGE CHARGES RESPECTIVELY. YOUR APPELLANTS FURTHER SUBMI T THAT THE LEARNED COMMISSIONER OF INCOME TAX (A)-XIV UPHE LD THE ORDER OF THE ASSESSING OFFICER. 2 III. YOUR APPELLANTS HUMBLY SUBMIT THAT IN RECENT CASE O F KOTAK SECURITIES LTD. VS. ADDITIONAL COMMISSIONER OF INCO ME TAX RANGE 4(3) MUMBAI IT APPEAL NO. 1955 (MUM) OF 2008(2008) 25 SOT 440 (MUM) WHERE THE TWO OF THE GROUNDS OF APPEAL WERE SIMILAR TO THE ABOVEMENTIONE D GROUNDS THE HONOURABLE TRIBUNAL VIDE ITS ORDER OF AUGUST 2008 HAD AFTER CONSIDERING THE VARIOUS ARGUMENTS HELD AS UNDER : A. DEPRECIATION IS ALLOWABLE ON WRITTEN DOWN VALUE OF THE MEMBERSHIP RIGHT OF STOCK EXCHANGE. B. SECTION 194J WOULD NOT BE APPLICABLE TO THE VSAT AND STOCK EXCHANGE CHARGES AND CONSEQUENTLY PROVISIONS OF SECTION 40(A)(IA) WOULD ALSO SNOT BE ATTRACTED AND THEREFORE DISALLOWANCE MADE WAS TO BE DELETED. 2. THE ASSESSEE SOUGHT AN ADJOURNMENT ON THE GROUN D THAT ONE OF THE DIRECTORS OF THE COMPANY WOULD BE OUT OF STA TION ON THE DATE OF HEARING. THIS CASE HAS COME UP BEFORE THE BENCH ON TWO EARLIER OCCASIONS AND THE ASSESSEE HAD SOUGHT ADJOURNMENT O N THE VERY SAME GROUND THAT THE DIRECTOR OF THE COMPANY WOULD BE OU T OF STATION ON THE DATE OF HEARING. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR GRANT OF AN Y FURTHER ADJOURNMENT. ACCORDINGLY WE REJECT THIS APPLICATION OF THE ASSES SEE AND DISPOSED OF THE CASE EXPARTE ON MERITS QUA THE ASSESSEE AFTER HEA RING THE LEARNED DR. 3. HEARD THE LEARNED DR. ON A CAREFUL CONSIDERATIO N OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED WE HOLD AS FOLLOWS. 4. THE FIRST ISSUE IS WHETHER THE ASSESSEE IS ENTI TLED TO CLAIM OF DEPRECIATION WITH RESPECT TO BOMBAY STOCK EXCHANGE CARD. THIS ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE R EVENUE BY THE 3 JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. M/S TECHNO SHARES & STOCK LTD. INCOME TAX APPEAL NO. 9 71 OF 2006 DECIDED ON 11 TH SEPT. 2009. RESPECTFULLY FOLLOWING THE SAME WE D ISMISS GROUND NO. 1 OF THE ASSESSEE. 5. COMING TO GROUND NO.2 WE FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD. V S. CIT IN ITA NO. 1955/MUM/2008 REPORTED IN (2008) 25 SOT 440 (MUM) H ELD THAT THERE IS NO REQUIREMENT OF DEDUCTING TAX AT SOURCE U/S 194J FOR PAYMENT MADE FOR VSAT CHARGES AS WELL AS FOR STOCK EXCHANGE CHARGES AND THUS NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA). RESPECTFULL Y FOLLOWING THE COORDINATE BENCH ORDER WE ALLOW GROUND NO. 2 OF TH E ASSESSEE. 6. GROUND NO. 3 IS NOTHING BUT REPETITION OF GROUN D NO. 1 & 2. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL 2010. SD/- SD/- (R.V. EASWAR) (J. SUDHAKAR REDDY) SENIOR VICE-PRESIDENT. ACCOUNTANT MEMBER. MUMBAI DATED : 30 TH APRIL 2010. COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI BENCHES MUMBAI. WAKODE