Facts of the Case

The appellant appealed against the denial of depreciation claims on the membership ticket of the Bombay Stock Exchange (BSE). The appellant sought to classify the BSE membership ticket as an intangible asset eligible for depreciation under Section 32(1)(ii) of the Income Tax Act, 1961. The counsel for the appellant conceded that the Supreme Court, in the case of Techno Shares and Stocks Ltd. v. Commissioner of Income Tax, 327 ITR 323, had already determined that a BSE membership ticket constitutes a "licence" or "business/commercial right" and qualifies as an intangible asset.

 

Issues Involved

  1. Whether the Bombay Stock Exchange membership ticket qualifies as an intangible asset under Section 32(1)(ii) of the Income Tax Act, 1961.
  2. Whether depreciation is allowable on the said membership ticket.
  3. Applicability of the Supreme Court’s judgment in Techno Shares and Stocks Ltd.

 

Petitioner’s Arguments

  • The appellant claimed that the BSE membership ticket is an intangible asset.
  • Sought depreciation under Section 32(1)(ii) as a commercial/business right.
  • Relied on precedents that treat exchange membership tickets as intangible assets eligible for depreciation.

 

Respondent’s Arguments

  • The respondent argued that depreciation on the membership ticket should not be allowed.
  • Relied on interpretation of Income Tax provisions and earlier tax authority rulings.
  • Highlighted that such depreciation claims must strictly follow judicial precedents.

 

Court Order / Findings

  • The learned counsel for the appellant conceded that the Supreme Court in Techno Shares and Stocks Ltd. v. Commissioner of Income Tax, 327 ITR 323 has ruled that a BSE membership ticket is an intangible asset and depreciation is allowable under Section 32(1)(ii) of the Income Tax Act, 1961.
  • Given this concession, the Court found that there was no question of law arising in the present appeals.
  • The appeals were accordingly dismissed.

Bench: A.K. Sikri, J. and M.L. Mehta, J.
Date of Order: 07.03.2011

 

Important Clarification

  • Membership tickets of recognized stock exchanges constitute intangible assets.
  • Depreciation on such tickets is permissible under Section 32(1)(ii) of the Income Tax Act, 1961.
  • Appeals may be dismissed if judicial precedent conclusively addresses the matter.

 

Sections Involved

  • Section 32(1)(ii) – Depreciation on intangible assets including licenses, franchises, and business rights.


Link to download the order-https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:11456-DB/AKS07032011ITA12992008_170849.pdf

 

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