2011 (3) TMI 1614 - AT - Income Tax

Summary

Issues involved: Allowability of depreciation on stock exchange card under section 32(1)(ii).

Summary:
The appeal was filed by the assessee against the order of CIT(A) for the assessment year 2007-08, specifically disputing the allowability of depreciation on a stock exchange card. The AO disallowed the depreciation claim based on a judgment of the Hon'ble High Court of Mumbai in the case of Techno Shares and Stock Ltd., which held that stock exchange card did not qualify as a business or commercial asset under section 32(1)(ii). The CIT(A) upheld the AO's decision, leading the assessee to appeal before the tribunal.

Upon hearing both parties and examining the records, the tribunal deliberated on the issue of depreciation on the stock exchange card. Initially, the Bombay High Court ruled that stock exchange card did not fall under section 32(1)(ii) for depreciation purposes. However, the Hon'ble Supreme Court later reviewed the same case and determined that a stock exchange card should be treated as a license, making it eligible for depreciation under section 32(1)(ii). Consequently, the tribunal, in line with the Supreme Court's judgment, overturned the CIT(A)'s decision and allowed the assessee's depreciation claim.

As a result, the appeal of the assessee was allowed, and the tribunal pronounced the order in the open court on 29.03.2011.