2012 (4) TMI 767 - AT - Income Tax

Summary

Issues involved: Disallowance of depreciation on BSE Membership Card and disallowance of business loss due to irrecoverable debt.

Depreciation on BSE Membership Card:
The assessee claimed depreciation on the membership right of Bombay Stock Exchange, citing a decision of Mumbai Bench of ITAT allowing depreciation on stock exchange ticket as an intangible asset. The AO rejected the claim, stating the case was under appeal. The CIT(A) upheld the AO's decision. The ITAT allowed the depreciation based on the decision of the Hon'ble Supreme Court in the case of Techno Shares & Stock (P) Ltd., holding the issue was settled.

Disallowance of Business Loss:
The assessee claimed a business loss of &8377; 27.71 lacs due to an irrecoverable debt. The AO disallowed the claim, stating the debt did not qualify as a bad debt u/s.36(1)(vii) as it was not included in the income computation. The CIT(A) upheld the disallowance. The ITAT concurred, finding the claim was an attempt to reduce taxable profits and not a genuine loss, as the debt was not included in the income computation. The appeal was partly allowed, with the disallowance upheld.