9911796707
TMI Blog2014 (4) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... e prepared by the people attached to the partnership firm – thus, it would be appropriate to allow the brokerage to the partnership firm to the extent of Rs.12 lakhs in each of the year as against Rs.15 lakhs paid by the assessee – Decided partly in favour of Assessee. Enhancement of capital gain – Sale of shares of BSE – Held that:- There is no justification in the action of the CIT(A) for allowing indexation from the year 2006, insofar as assessee company has taken the membership card from partnership firm in the year 1997 - the cost paid by the assessee company to the partnership firm is eligible for indexation from the year 1997 and not the year 2006 as per provisions of Section 55 (2)(b) r.w. clause (iii) of Explanation to Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness is being carried out by assessee company since 1997-98 and appellant company has been paying the brokerage to its sister concern, the partnership firm M/s Porecha Bros. During the year under appeal, assessee company had turnover of Rs.1,70,36,691/- comprising of institutional clients and retail clients plus it also includes discount, service tax and interest. The assessee also booked gross income in the form of brokerage of Rs. 1,56,08,0901- and other income Rs.14,28,601/-. As against this the assessee had paid sub-brokerage to the tune of Rs. 51.98.835/- which was deducted from the gross income along with service tax paid to the tune of Rs 16,02,892/- and the net income from brokerage of Rs.99.74,520/- was shown in the Profit b Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case during the year. There is no material on record to suggest that partnership firm has not rendered any services to the assessee company rather as per material placed on record the partnership firm has put lot of efforts in building up clientele base, as per the understanding they were entitled to these brokerage. The allegations made by the AO that Porecha Brothers have low income are mere conjecture and surmises. There is no dispute to the fact that payment of brokerage was made to M/s Prorecha Brothers, who comes under mischief of Section 40A(2)(b), as the directors are common partner. Even while disallowing payment made to a concern falling under Section 40A(2)(b), onus is on the Revenue to prove that consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in both the years are allowed in part in terms indicated hereinabove. 4. The next grievance of the assessee for the assessment year 2008-09 relate to enhancement of capital gain offered by the assessee on sale of shares of Bombay Stock Exchange. Facts in brief are that the business of stock exchange was earlier taken care of by M/s Porecha Brothers as partnership firm. This firm was card holder of Bombay Stock Exchange. The partners of the firm then decided to corporatization their business and hence, established the present company. The said partnership firm then transferred the card to the assessee company in the financial year 1997-98. This action was taken to take the advantage of scheme introduced by the Finance Ministry for wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on from the year 2006, insofar as assessee company has taken the membership card from partnership firm in the year 1997, the cost paid by the assessee company to the partnership firm is eligible for indexation from the year 1997 and not the year 2006 as per provisions of Section 55 (2)(b) r.w. clause (iii) of Explanation to Section 48. Now, we take the decision relied upon by the learned DR in the case of M/s D.J.Shah Securities Pvt. Ltd., passed in ITA No.2314/Mum/2012, vide order dated 22-11-2013, wherein it was held that indexed cost is to be computed with reference to the WDV of the stock exchange card, on which the assessee has already claimed depreciation. However, in the instant case before us, it is not the case of the department th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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