Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment years 1999-2000 to 2002-03 - Whether right of membership conferred upon a member under BSE membership card in terms of rules and Bye-laws of BSE, as they stood during relevant assessment years, was a 'business or commercial right' which gave a non-defaulting continuing member a right to access exchange and to participate therein and, in that sense, it was a licence or akin to a licence in terms of section 32(1)(ii) - Held, yes - Whether, therefore, for relevant assessment years, depreciation was allowable on cost of BSE membership card under section 32(1)(ii) - Held, yes FACTS In its returns of income for the relevant assessment years, the assessee claimed depreciation on the BSE membership card. It claimed before the Assessing Officer that the BSE membership card was a 'licence' or 'business or commercial right of similar nature' under section 32(1)(ii ) and, therefore, was an intangible asset eligible for depreciation under section 32(1)(ii). The Assessing Officer rejected the assessee's claim. The decision of the Assessing Officer stood affirmed by the Commissioner (Appeals). On second appeal, the Tribunal held that the BSE membership card was a capital asset through which the assessee had acquired the right to trade on the floor of the BSE and since it was an intangible asset, the assessee was entitled to depreciation thereon under section 32(1)(ii). On the revenue's appeal, the High Court held that the BSE membership card was only a personal privilege granted to a member to trade in the shares on the floor of the stock exchange and such a privilege could not be equated with the expression 'licence' or "any other business or commercial rights of similar nature" under section 32(1)(ii). The Court held that the expression 'licence' as well as the expression "business and commercial rights of similar nature" in section 32(1)(ii) are referable to IPRs, such as know-how, patent, copyright, trademark and franchise and since the BSE membership card did not fall in any of the above categories, the claim for depreciation under section 32(1)(ii) was not admissible on the BSE…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492