TaxTMI 
TaxTMI 
2013 (12) TMI 1009
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....on tenancy rights amounting to Rs. 2,90,948. Briefly stated the facts of this ground are that the assessee claimed depreciation on tenancy rights. The Assessing Officer rejected such claim following the view taken by him for the assessment years 2003-2004 to 2007-2008. The learned CIT(A) upheld the assessment order on this issue. 3. After considering the rival submissions and perusing the relevant material on record, we find that the earlier years came up for consideration before the Tribunal in ITA No.6050/Mum/2007 etc. Vide order dated 09.04.2010, the Tribunal has upheld the view of the authorities below by relying on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Techno Shares & Stocks Limited (2010) 3....
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....with approval by the Hon'ble Supreme Court in several judgments including CIT VS. Venketaswara Hatcheries (1999) 237 ITR 174 (SC), Stonecraft Enterprises VS. CIT (1999) 237 ITR 131 (SC) and Aravinda Paramilla Works VS. CIT (1999) 237 ITR 284 (SC). Going by this rule, the expression "any other business or commercial rights" as employed in the definition of "intangible" assets as per the above Explanation, must mean only the intangible assets similar to those which precede it, that is, "know-how, patents, copyrights, trade marks, licences, franchises". The former category of intangible assets includes such assets with which the business is directly carried on. In other words, these are intangible assets by which either the permission to c....
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....ble" assets falling within the meaning of Explanation 3 to section 32(1). The reliance of the ld. DR on the judgment of the Hon'ble Supreme Court in Techno Shares (supra) is of no consequence. In that case the question was whether depreciation can be granted on the Bombay Stock Exchange Membership card. As the ownership of such Membership Card is sine qua non to conduct the business on the floor of stock exchange, the Hon'ble Supreme Court held it to be an intangible asset eligible for depreciation. Such Membership card is a permission to do the business as share broker akin to licence' and not a place for carrying on such business akin to tenancy right'. In our considered opinion, this judgment does not advance the case of ....
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....' on which tax liability is determined u/s 115JB. Clause (f) to the Explanation (1) provides that the net profit shown in the profit and loss account shall be increased by : "(f) the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause 38 thereof) or section 11 or section 12 apply;". A bare perusal of clause (f) of Explanation (1) makes it abundantly clear that the amount of expenditure "relatable to" any exempt income, other than section 10(38), is liable to be added back to the amount of net profit as shown in the profit and loss account. When we turn to the language of section 14A, it transpires that it talks of disallowing any expenditure incurred in relation to&....
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....profit and loss account nor there can be an implication in this regard. What has been contemplated by the provision is the amount of the expenditure relatable to' the exempt income. Further, the amount disallowable u/s 14A is always part of the expenses specifically debited to the profit and loss account. It is axiomatic that unless any expenditure is incurred and claimed as deduction, there can be no question of any hypothetical disallowance u/s 14A. It, therefore, follows that the amount disallowable u/s 14A is covered under clause (f) of Explanation (1) to section 115JB(2). Our view is fortified by the decision of the Mumbai bench of the tribunal in M/s.RBK Share Broking Pvt.Ltd. v. ITO in ITA No.6678/Mum/2011 and another earlier ord....