The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench directed the AO to delete addition on account of depreciation on membership card.
The assessee, Edelweiss Financial Advisors Ltd. is a limited company and engaged in the business of stockbroking. The AO during the assessment proceedings found that the membership card of the stock exchange held by the assessee has been demutualized/corporatized into the shares in the earlier year 2005-06.
As such the assessee was not in the possession of a stock exchange card in the year under consideration.
Accordingly, the AO was of the view that the depreciation claimed by the assessee on the intangible asset being membership card of the stock exchange is not allowable under the provisions of Section 32 of the Act. Accordingly, the AO disallowed the same and added to the total income of the assessee.
The assessee preferred an appeal to the CIT(A) who deleted the addition made by the AO.
The issue raised by the Revenue is that CIT(A) erred in deleting the addition made by the AO for Rs.79 on account of depreciation claimed under Section 32 of the Act on the membership card despite the conditions for claiming the depreciation were not satisfied.
The Coram headed by President Justice P.P. Bhatt confirmed the order of the CIT(A) in view of the order of this tribunal in the own case of the assessee directed the AO to delete the addition made by him.
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