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TMI Blog2012 (2) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... and acknowledgement card duly receipted is on record. However, we find from perusal of records that both the issues are covered, therefore, we proceeded to decide the appeal on ex parte basis. 3. Issue No.1: After hearing both the parties we find that assessee has claimed depreciation amounting to Rs.15,04,143/- towards depreciation on membership rights which was disallowed by the AO because BSE has been demutualised and assets were taken over by BSE Ltd. w.e.f. 19-8-2005 and as per the scheme trading members may or may not be the shareholders. On demutualisation the asset in the form of BSE card ceased to exist. Therefore, depreciation according to the AO was not allowable. 4. On appeal, the decision of the AO was confirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nil. Under these circumstances, there is no value to the trading in commercial right entitling the assessee for deduction by way of depreciation. Hence, no depreciation can be granted on this right. Thus, we uphold the finding of the Revenue authorities. We now discuss the impact of the following sections: 55(2) For the purposes of sections 48 and 49, cost of acquisition (ab) In relation to a capital asset, being equity share or shares allotted to a shareholder of a recognised stock exchange in India under a scheme for demutualisation or corporatisation approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992, (15 of 1992) shall be the cost of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llotment or transfer of such specified security or sweat equity shares. 47(xiii) any transfer of a capital asset or intangible asset by a firm to a company as a result of succession of the firm by a company in the business carried on by the firm, or any transfer of a capital asset to a company in the course of demutualisation or corporatisation of a recognised stock exchange in India as a result of which an association of persons or body of Individuals is succeeded by such company:] Provided that- (a) all the assets and liabilities of the firm (or of the association of persons or body of Individuals] relating to the business immediately before the succession become the assets and liabilities of the company; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll these sections deal with computation of capital gains under Chapter--IV(E) i.e., section 45 to 55A of the Act. In our considered opinion, sections which are for the computation of capital gains, have no relevance on the allowability of depreciation. The argument of the assessee that it had taken the original cost of the share 1, while computing capital gain in a latter year, does not effect our decision. Thus, we uphold the order the Assessing Officer as confirmed by the Commissioner (Appeals) wherein depreciation on membership card has been denied. Therefore, following the above order, we decide this issue against the assessee. 7. As far as issue regarding disallowance u/s.14A is concerned, since it has been held by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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