Jaya Hind Investments Pvt. Ltd., Pune V. Asstt.CIT, Range-9, Pune, Pune

ITA 1222/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49872 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 12-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SHIVAGUNDE
• Assessee Lawyers: S N INAMDAR
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI G.S. PANNU, AM. I.T.A. NO. 1222/PN/2009 : A.Y. 2003-04 JAYA HIND INVESTMENTS PVT.LTD. AKURDI, PUNE-411 0356 PAN AACCI 4269 R .. APPELLANT VS. ASSTT. CIT RANGE 9, PUNE .. RESP ONDENT I.T.A. NO. 1223/PN/2009 : A.Y. 2003-04 PRASANNA HOLDINGS PVT.LTD. AKURDI, PUNE-411 0356 PAN AABCP 1937 H .. APPELLANT VS. ASSTT. CIT RANGE 9, PUNE .. RESP ONDENT APPELLANTS BY: SHRI S.N INAMDAR RESPONDENT BY: SHRI S.C. SHIVAGUNDE ORDER PER SHAILNDRA KUMAR YADAV, JM BOTH THESE APPEALS RAISE COMMON ISSUE. THEREFORE, THEY WERE TAKEN UP FOR HEARING TOGETHER AND ARE BEI NG DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. 2. BOTH THESE APPEALS BY DIFFERENT ASSESSES ARISE O UT OF SEPARATE ORDERS OF THE CIT(A) BOTH DATED 24-7-20 09 FOR A.Y. 2003-04 ON THE POINT OF DEDUCTION CLAIMED U/S 80-M OF THE INCOME-TAX ACT, 1961. ITA NO. 1222 & 1223/PN/2009 JAYAHIND INVEST AND PRASANNA HOLDINGS A.Y. 2003- 04 2 ITA NO. 1222/PN/2009 IN THE CASE OF JAYA HIND INVESTMENTS PVT.LTD. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGE D IN THE BUSINESS OF DEALING IN SHARES AND SECURITIES . DURING THE YEAR UNDER CONSIDERATION, THE COMPANY RECEIVED DIVIDENDS OF RS. 9,95,61,090/- ON SHARES O F THE DOMESTIC COMPANIES. DURING THE FINANCIAL YEAR 2002 -03, THE COMPANY PAID AN INTERIM DIVIDEND ON 10-12-2002 AMOUNTING TO RS. 2,50,00,000/- TO ITS SHAREHOLDERS. THE COMPANY ALSO DECLARED DIVIDENDS OF RS. 5,00,00,000/-. THE PAYMENT OF THESE DIVIDENDS WERE MADE ON OR BEFORE 30-11-2003 I.E. BEFORE FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE COMPANY ALSO PAID DIVIDEND TAX ON THE DISTRIBUTED DIVIDENDS OF RS. 5,00,00,000/-. THIS TAX WAS PAID U/S 115-O OF THE ACT. THE ASSESSEE CLAIMED DEDUCTION OF RS. 7,50,00,000/- U/S 80-M OF THE ACT AGAINST THE DIVID END INCOME RECEIVED TO THE EXTENT OF DIVIDEND PAID BEFO RE THE DUE ATE OF FILING OF RETURN. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF ASSESSEE IN THE LIGHT OF PROVISIONS OF SECTION 115-0(5) OF THE ACT HOLDING THAT THE DEDUCTION U/S 80-M OF THE ACT WAS NOT ALLO WABLE SINCE THE SAME WAS IN ITA NO. 1222 & 1223/PN/2009 JAYAHIND INVEST AND PRASANNA HOLDINGS A.Y. 2003- 04 3 RESPECT OF SUCH DIVIDENDS DECLARED BY THE ASSESSEE WHICH WERE TAXED U/S 115-0(1) OF THE ACT. THE CIT(A ) CONFIRMED THE SAME. 4. IN APPEAL BEFORE US, THE STAND ON BEHALF OF THE ASSESSEE IS THAT AS PER SECTION 80-M OF THE ACT, DEDUCTION WAS ALLOWABLE TO THE EXTENT OF THE AMOUNT OF DIVIDEND DISTRIBUTED BY THE ASSESSEE COMPANY ON OR BEFORE THE DUE DATE OF FILING OF RETURN. IT WAS ALS O SUBMITTED THAT SINCE THE DIVIDENDS WERE DISTRIBUTED BY THE COMPANY BEFORE THE DUE DATE OF FILING OF RETURN VIZ. 30-11-2003 FOR A.Y. 2003-04 THE COMPANY WAS ENTITLE D FOR DEDUCTION U/S 80-M OF THE ACT. THE ASSESSEE ALS O CONTENDED THAT THE PROVISIONS OF SECTION 115 OF THE ACT AS SUBSTITUTED BY THE FINANCE ACT, 2003 ARE APPLICA BLE FROM A.Y. 2004-05 BEING APPLICABLE FOR DIVIDEND DECLARED, DISTRIBUTED OR PAID DURING THE PREVIOUS Y EAR 2003-04 I.E. RELEVANT TO A.Y. 2004-05 AND ONWARDS. HENCE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN AP PLYING THE PROVISIONS OF SECTION 115-O OF THE ACT FOR THE YEAR UNDER CONSIDERATION. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT SIMILAR ISSUE CAME UP ITA NO. 1222 & 1223/PN/2009 JAYAHIND INVEST AND PRASANNA HOLDINGS A.Y. 2003- 04 4 FOR CONSIDERATION BEFORE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CASTLE INVESTMENT & INDUSTRIES PVT. LTD. VS. ITO WARD 8(1)(2) MUMBAI IN ITA NO. 1713/MUM/2006 FOR A.Y. 2003-04 DATED 18 TH JULY 2007 WHEREIN FOLLOWING ITS EARLIER ORDER IN THE CAS E OF ITO VS. M/S. KASKOBAD BYRAMJEE & SONS AGENCY PVT. LTD.. IN ITA NO. 4102/MUM/2001 AND ALSO IN THE CASE OF SILVASSA INDUSTRIES PVT. LTD. VS. DCIT IN ITA NO. 462/MUM/2002 DT. 10/5/2002 FOR A.Y. 1997-98, IT WA S HELD THAT THE DEDUCTION U/S 80-M OF THE ACT IS ALLO WABLE TO THE ASSESSEE ON DIVIDEND RECEIVED BY THE ASSESSE E AGAINST WHICH THE ASSESSEE HAD PAID INTERIM DIVIDEN D. IT IS PERTINENT TO MENTION THAT THE ORDER OF THE TR IBUNAL IN THE CASE OF CASTLE INVESTMENT & INDUSTRIES PVT. LTD., (SUPRA) WAS THE SUBJECT MATTER OF APPEAL BEFORE HON BLE HIGH COURT OF JUDICATURE AT BOMBAY IN INCOME-TAX APPEAL NO. 1557 OF 2007 WHEREIN VIDE ITS JUDGMENT DATED 22-7-2008 THE HONBLE HIGH COURT FOUND THAT THERE WAS NO QUESTION OF LAW INVOLVED. NOTHING CONT RARY WAS BROUGHT TO OUR KNOWLEDGE. IN THIS VIEW OF THE MATTER, FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF CASTLE INVESTMENT & INDUSTRIES PVT. LTD (SUPRA), WE REVERSE THE ORDER OF THE CIT(A) AND DIRECT THE ASSE SSING ITA NO. 1222 & 1223/PN/2009 JAYAHIND INVEST AND PRASANNA HOLDINGS A.Y. 2003- 04 5 OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 80-M OF THE ACT AS CLAIMED BY THE ASSESSEE. 6. SIMILAR ISSUE HAS BEEN RAISED BY THE ASSESSEE IN ITA NO. 1223/PN/2009 IN THE CASE OF PRASANNA HOLDIN GS PVT. LTD. FOR THE DETAILED REASONING GIVEN IN PRECE DING PARAGRAPHS WHILE DEALING WITH THE APPEAL IN ITA NO. 1222/PN/2009 IN THE CASE OF JAYA HIND INVESTMENTS PVT. LTD., PUNE, WE REVERSE THE ORDER OF THE CIT(A ) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 80-M OF THE ACT AS CLAIMED BY THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ABOVE ASSESSES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE: DATED: 30 TH JUNE 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A) III PUNE 4. THE CIT, - V PUNE 5. THE D.R, A BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITA NO. 1222 & 1223/PN/2009 JAYAHIND INVEST AND PRASANNA HOLDINGS A.Y. 2003- 04 6 ITAT, PUNE BENCHES, PUNE