1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.94 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. M/s. Prebon Yamane (I) Pvt. Ltd. ..Respondent. Mr. Vimal Gupta for appellant. Mr. A.K.Jasani for respondent. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 11TH SEPTEMBER, 2009. P.C. :- 1. Heard learned counsel for the parties. This appeal was admitted on 9/9/2009 on the following substantial questions of law:- 1. Whether on the facts and circumstances of the case and in law the Tribunal has erred in confirming the order of the learned Commissioner of Income Tax (A) in holding that the expenditure of Rs. 5,75,000/- was allowable u/s.37(1) of the I.T. Act, 1961 ? 2. Whether on the facts and circumstances of the case and in law the Tribunal has erred in confirming the order of the learned Commissioner of Income Tax (A) in holding that the expenditure of Rs. 5,75,000/- incurred in respect of "sign on bonus" to employees was a revenue expenditure ? 3. Whether on the facts and circumstances of the case and in law the Tribunal was correct in holding that the membership of the Bombay Stock Exchange is capital asset even though as per the decision of the Hon'ble Supreme Court in the case of Stock Exchange, Ahmedabad Vs/ ACIT and Bombay High Court in the case of the Stock Exchange, Bombay V/s. V.S. Kandalgaonkar, ACIT and others; membership of the Stock Exchange is only a personal privilege granted by the Stock Exchange to the member ? 2 4. Whether on the facts and circumstances of the case and in law the Tribunal failed to consider that the basic ingredients of ownership, wear and tear and obsolescence are not present in the BSE membership card and therefore, the assessee cannot claim to be its owner for the purpose of claiming depreciation on the same ? 5. Whether on the facts and circumstances the case and in law, the Tribunal was correct in holding that the BSE card is an intangible asset within the definition of section 32(1) (ii) of the Income Tax Act,. when the "personal permission" granted by the BSE is not a descendant of common ancestry or akin to knowhow, copyrights, patents, trademarks, franchises in origin, nature and quality but far away from intangible assets mentioned in section 32(1)(ii) of the Income Tax Act ? 6. Whether on the facts and circumstances of the case and in law the Tribunal was correct in holding that the Membership of Bombay Stock Exchange is entitled to depreciation without considering whether it really suffers from diminution in its value ? 2. Having heard both counsel for the parties, appeal is allowed for the reasons recorded in the Division Bench judgment of this Court in Income Tax Appeal (L) No.971 of 2006 [CIT V/s. M/s. Techno Shares & Stocks Ltd. (with other matters) decided on 11th September, 2009 since the questions sought to be raised relate to the depreciation with regard to BSE membership card. The question is answered in favour of the revenue and against the assessee. No order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA, J.)