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of <h1>Tribunal allows deduction under section 80-M for dividends taxed under section 115-O(1)</h1> <h3>Jaya Hind Investments Pvt. Ltd. And Prasanna Holdings Pvt. Ltd Versus Asstt. CIT Range 9, Pune.</h3> Jaya Hind Investments Pvt. Ltd. And Prasanna Holdings Pvt. Ltd Versus Asstt. CIT Range 9, Pune. - TMI Issues involved: The judgment deals with the deduction claimed u/s 80-M of the Income-tax Act, 1961 for Assessment Year 2003-04 based on dividends received by a private limited company dealing in shares and securities.Details of the judgment:1. Issue of deduction u/s 80-M: - The company claimed a deduction of &8377; 7,50,00,000/- u/s 80-M against the dividend income received, which was paid before the due date of filing the return. - The Assessing Officer disallowed the claim citing section 115-O(5) of the Act, as the dividends declared by the company were already taxed u/s 115-O(1). - The CIT(A) upheld the disallowance. - The company contended that since dividends were distributed before the due date of filing the return, they were entitled to the deduction u/s 80-M. - It was argued that the provisions of section 115 of the Act were not applicable for the year under consideration. 2. Judgment and reasoning: - The Tribunal referred to a similar case and held that deduction u/s 80-M is allowable to the assessee on dividends received against which interim dividends were paid. - The Tribunal reversed the CIT(A)'s order and directed the Assessing Officer to allow the deduction as claimed by the assessee. 3. Additional case reference: - Another similar issue was raised by an assessee in a separate case, and based on the reasoning provided in the previous case, the Tribunal reversed the CIT(A)'s order and directed the Assessing Officer to allow the deduction u/s 80-M.4. Final decision: - Both appeals by the assesses were allowed, and the order was pronounced on June 30, 2011.This judgment clarifies the eligibility of a private limited company to claim deduction u/s 80-M of the Income-tax Act, 1961 based on dividends distributed before the due date of filing the return, despite the dividends being taxed under a different section of the Act.
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