2017 (1) TMI 177

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.... of the case the membership seat of a Stock Exchange is a property or merely a personal privilege granted to a member by the stock exchange and whether the same can be treated as "Capital Asset" within the meaning of section 2(14) of the Act? 2. Whether admission fees paid by the appellant can be considered as cost of acquisition within the meaning of section 55 of the Act for the purpose of computing the capital gain u/s 45 of the Act?" 3. The facts of the case are that the assessee was a member of Jaipur Stock Exchange and transferred his membership ticket to Shri Girdhari Lal Singhal for a consideration of Rs. 9,51,000/-. The assessee claimed that he has paid no consideration for acquiring this membership, hence it is not capital asse....

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....mbership of the Bombay Stock Exchange is put on sale through the nomination, a personal privilege is converted into an asset and the consequential gain is exigible to tax. That would be in line with the legislative intent as apparent from the provisions of section 47(xi) and the CBDT's circular. That would also be in conformity with the ground realities which show that membership cards are being sold the substantial consideration." Similar views were taken by ITAT Jaipur Bench in a number of cases including Shri Pradeep Gupta vs. WTO(WTA Nos. 241/JP/99) dated 13.01.2004." 5. Now the issue is settled by the Supreme Court in 248 ITR 209 (Stock Exchange, Ahmedabad Vs. Assistant Commissioner of Income Tax) more particularly holding as un....

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....lant stock exchange on February 19, 1988, died on February 7, 1994. On February 12, 1994, his heirs and legal representatives wrote to the stock exchange that they were unable to meet the liabilities of the deceased. On the same day, the governing body of the stock exchange declared R a deemed defaulter and resolved that his membership rights which vested in the stock exchange be disposed of, fixing a floor price of Rs. 25 lakhs for purchase of membership. On February 15, 1994, a provisional attachment order was issued under section 281B of the Income-tax Act, 1961, in respect of the stock exchange card in the name of R and margin money and security deposits kept with the stock exchange. The stock exchange took the stand that on the death o....

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....d not be attached under section 281B; and, since no amount on account of R was due from or held by the stock exchange, section 226(3) could not be invoked. 6. In view of decision of Supreme Court reported in[2010] 327 ITR 323 (SC) (Techno Shares and Stocks Ltd. Vs. Commissioner of Income Tax) wherein it has been held as under:- "the question was whether the assessee-company could claim depreciation on the Bombay Stock Exchange membership card held by it on the basis that it was a "licence" or "business or commercial right of a similar nature" under section 32(1)(ii) of the Income-tax Act, 1961. The Assessing Officer and the Commissioner(Appeals) held that the assessee could not claim depreciation on the stock exchange membership card; bu....