9911796707
TMI Blog2012 (10) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld Assessing Officer particularly without providing any opportunity of hearing to the appellant. 3. The observations as well as the addition made by the Ld Assessing Officer as well as by the Ld CIT(A) are against the facts as well as law and are without providing proper opportunity of hearing to the appellant. 4. The orders of the Assessing Officer as well as the Ld CIT(A) are against the facts of the case and law. 2. The brief facts of the case are that the assessee is a Partnership firm and is a Member of Multi Commodity Exchange of India (MCX) and National Commodity and Derivative Exchange (NCDX) and is doing business of arbitrage, hedging etc. As per assessment order the firm came into existence on 3rd August, 2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the assessee, he did not offer any comment in view of assessee s not giving any citation. Therefore, he made an addition of Rs..16,02,000/-. However, treating the addition on account of capital expenditure he allowed depreciation of Rs..1,60,200/- @ 10%. 4. Dissatisfied with the order, the assessee filed appeal before the Ld CIT(A) and submitted as under:- i) That the payment of admission fee was necessarily revenue expenditure because the payment of the same entitled the assessee firm to carry on the business activity and the payments made to exchanges was a non refundable and hence admission fee was an integral part of profit earning process. Reliance was placed on the following judgments:- 1. Neset Holdings (P) Ltd. v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as revenue expenditure. Similarly, our attention was invited to judgment of Hon'ble Madras High Court in the case of CIT v. S.Venkatasubramaniam placed at paper book page 6 wherein it was held that admission fee paid to become a Member of stock exchange was condition precedent to acquire the membership card and by incurring these expenditure the assessee had acquired a right of trading in shares and securities at the terminal of stock exchange and hence such payment was necessary for the assessee to carry on the business. The Hon'ble Court further held that since the assessee did not become the owner of any of the assets in the stock exchange, it cannot be said that any enduring benefit had accrued to him. Therefore, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admission fee and other charges as applicable from time to time. So payments were necessary for the assessee to carry on the business. By becoming a Member, the assessee became entitled to the benefit of using all the facilities of stock exchange and assessee did not become owner of any of the assets of the stock exchange. Therefore, it cannot be said that any enduring benefit had accrued to the assessee. In the case of the assessee no new asset has been created and there is no increase in the profit making operatus of the assessee. Payment of admission fee is like a license fee and it is paid only for carrying on the business. Therefore, if the payment is made for the purpose of running business effectively and necessarily then it is only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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