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TMI Blog2011 (3) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... on Corporatization and demutualization of the BSE as a limited company - While computing capital gain on such transfer the assessee calculated its cost of acquisition on the basis of the written down value and Re.1 which had paid per share at the time of issue of shares by BSE Ltd - With regard to the remaining shares of BSE Ltd. which the assessee holds the question of computation of capital gain would continue to be the same basis on which the assessee has computed capital gain in A.Y 2008-9. In view of the above we are of the view that the CIT(A) was justified in deleting the addition made by the AO - Decided in favour of assessee. Provision of section 41(1) and 38(iv) of the Income Tax Act - Non-deduction of tax at source in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was a member of the Bock Stock Exchange(BSE). Till A.Y. 2005-06 the assessee was claiming depreciation on BSE Card. The assessee has originally acquired the BSE Card for a sum of Rs. 1,30,00,000/-. The assessee has been claiming depreciation of BSE Card and was allowed depreciation. The WDV of the BSE Card as on 1/4/2005 was Rs.20,24,505.61. During the previous year consequent to Corporatisation and demutualization, the BSE become a Limited Company i.e., BSE Ltd. The members of the erstwhile BSE were given shares in BSE(Limited Company) in consideration of their surrendering the BSE Card (erstwhile membership). By virtue of holding such shares and complying with certain other conditions members had trading rights in the BSE(Limited C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a benefit to the extent of Rs.1,09,75,494/- in the form of recovery of depreciation already allowed on the BSE Card which would be taxable under section 41(1)(a) of the Act. Alternatively the AO was also of the view that the benefit received by the assessee is taxable under section 28(1)(iv) of the Act. 5. The AO was of the view that the depreciation was allowed to the assesse only because the orders of the ITAT in assessee's own case and the revenue is of the view that depreciation cannot be allowed on BSE Card and further appeal before the Hon'ble Bombay High Court by the revenue was yet to be adjudicated. According to the AO if depreciation ultimately held to be not allowable of BSE Card then the depreciation disallowed in the past i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the Card + 10,000/- and declared Long Term Capital Gain of Rs.3,17,66,801/- by taking the cost of 6386 shares at Rs. 12,99,235/- and indexing the same and thus it is very clear that the assesseee has not taken the cost of BSE shares at the original cost of Rs.1,30,00,000/-. The assessee enclosed a copy of computation filed with the Return of Income for A.Y 2008-09. 7. The CIT(A) held as follows: "1.3 I have gone through the order of the AO and submission of the appellant. The AO's apprehension that the appellant would get double benefit is found to be not correct in view of the appellant's conduct during A.Y.2008-09 while selling 6386 shares of BSE Ltd. As and when the balance amount of shares would be sold, the Long Term Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee calculated its cost of acquisition on the basis of the written down value and Re.1 which had paid per share at the time of issue of shares by BSE Ltd. Thus the grievance of the revenue as projected by the AO is found to be non-existent in this case. With regard to the remaining shares of BSE Ltd. which the assessee holds the question of computation of capital gain would continue to be the same basis on which the assessee has computed capital gain in A.Y 2008-9. In view of the above we are of the view that the CIT(A) was justified in deleting the addition made by the AO. The order of the CIT(A) does not call for any interference. Consequently ground No.1 raised by the revenue is dismissed. 11. Ground No.2 raised by the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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