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TMI Blog2011 (12) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to discontinue of business, allowability of depreciation on BSE card and employer / employees contribution to PF. 2. We first take up the issue relating to discontinuance of business, as this is a basic issue having bearing on other grounds of appeal and is common in all the years. The facts in brief are that the assessee who was a share broker having BSE membership card had not undertaken any share trading activities during the relevant years. The assessee had received interest income from FDR pledge for the purpose of share broking and / or dividend income from shares held in trading account which had been declared as business income. The assessee had however, claimed various expenses including depreciation on BSE card a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.04.2001 had debarred the assessee from undertaking any fresh business as stock broker and Merchant Bankers till further orders. SEBI passed an order dated 21.06.2001 stating that the ban on business would continue till further notice. Further, vide order dated 08.03.2004, SEBI had cancelled the certificate of registration of the assessee. The assessee had filed an appeal to the Securities Appellate Tribunal (SAT) in April, 2004, which was also dismissed by order dated 11.05.2007. It was argued that dismissal of the appeal by the assessee was a subsequent development and till that time the business of the assessee was only suspended and not closed. It was also pointed out that the assessee company had not been delisted as a member of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been passed by the SEBI and the appeal of the assessee had been dismissed by SAT. The Tribunal observed that SEBI had debarred the assessee from undertaking share business till further orders and the appeal of the assessee had been dismissed by the SAT only in the year 2007, which was a subsequent event and, therefore, during the year under consideration the business of the assessee could only be considered as suspended and not closed. The Tribunal, therefore, following the judgment of Hon'ble High Court of Madras in case of CIT vs. Vellore Electric Corporation Ltd. (243 ITR 529) held that the business of the assessee had not been closed and the claim of the expenditure has to be allowed against the interest income declared as business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 32(1)(ii). He, therefore, disallowed the claim of depreciation. In appeal, CIT(A) observed that there were contrary decisions of the Tribunal on this issue. In case of Techno Shares and Stock Ltd. vs. ITO (101 TTJ 349), the Tribunal held that BSE card was an intangible asset used in the business and, therefore, depreciation was allowable. But in case of Vyomit Shares, Stock and Investments Pvt. Ltd. vs. DCIT (107 TTJ 422), it was held that BSE card was an intangible asset and depreciation could be allowed only from the Assessment Year 1999-2000 as per section 32(1)(ii). CIT(A) further observed that irrespective of the fact whether BSE card was an intangible asset entitled for depreciation or not, depreciation could not be allowed, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... card is an intangible asset entitled for depreciation. Therefore, there is no dispute regarding the allowability of depreciation on BSE card. The only dispute raised by the Ld. DR is that since the card had been acquired prior to 01.04.1998, no depreciation could be allowed u/s.32(1)(ii). However, we find that in assessee s own case in Assessment Year 1999-2000, depreciation has been allowed in respect of the same BSE card by the AO on the direction of the ITAT in ITA No.3716/Mum/2004. Since, depreciation has already been allowed on the direction of the ITAT in the earlier year, in our view, it will not be appropriate to disallow the same in the subsequent year. We, therefore, set aside the order of the CIT(A) on this point and allow the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature, as the same had been inserted to remove intended consequences. The effect of the said judgment is that contributions deposited before the due date of filing of return of income has to be allowed as deduction. Following the said judgment, the various benches of the Mumbai Tribunal have been allowing the claim both in relation to the employer s contribution and employee s contribution, if deposit is within the due date of filing the return of income. We, therefore, direct the AO to allow the deduction if contributions have been paid before the due date of filing the return of income after necessary verification. 10. In the result, all the appeals of the assessee are allowed in terms of the order above. Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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