The assessee which is engaged in stock exchange operations, claimed deduction of the payment made to the stock exchange for admission fees and processing charges. The AO disallowed the claim as revenue expenditure. On appeal the CIT (A) concurred with the Assessing Officer but allowed the assessee’s alternative claim for grant of depreciation thereon. On appeal by the assessee the Tribunal held that according to rule 18(b) of the National Stock Exchange Rules, the certificate or entitlement slip, which accords the benefits and privileges of trading membership of the Exchange, is transferable by nomination subject to approval, and rule 20 thereof prohibits a trading member from assigning, mortgaging, pledging or charging his right of membership, rights or privileges attached thereto. As a result, the membership creates an intangible right in favour of the assessee, which is capable of being transferred or transmitted. These rights are in the nature of rights in personam, have an element of permanency and of being a source of income; therefore, they constitute property of a capital nature within the meaning of section 2(14) of the Act. Such rights are not in the nature of stock-in-trade, consumable stores or raw material. The assessee was not entitled to deduction of the admission fees. (AY. 2013-14)