2019 (7) TMI 1278 - HC - Income Tax

SC rules deletion of dividend income addition for AY 2012-13; Tribunal decision upheld.

THE PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), SURAT Versus ASHADEVI MITTAL (PROP. MITTAL CHEMICALS)

The SC upheld the deletion of the addition of dividend income for AY 2012-13 as the assessee did not receive any dividend income during that year. The ... Addition on account of dividend income received - Accrual of income - Tribunal recorded finding of facts that dividend was received in the FY 2012-13 in the bank on 16.10.2012 i.e no dividend income was not received in the year ending 31.3.2012 and further assessee has declared the dividend income in the assessment year 2013-14 amounting to ₹ 15,29,220.00 which was duly accepted by the Revenue - HELD THAT:- In view of the findings of fact with regard to receiving of the dividend, we do not find any error, not to speak of any error of law, in the impugned order. - this Appeal fails and is hereby dismissed. Issues:1. Whether the Appellate Tribunal erred in deleting the addition of dividend income received by the assessee during A.Y. 2012-13Rs.Analysis:The Tax Appeal under Section 260A of the Income Tax Act, 1961, was filed by the Revenue against the order of the Income Tax Appellate Tribunal. The Revenue challenged the deletion of the addition of Rs. 43,12,165 on account of dividend income received by the assessee during the Assessment Year 2012-13. The assessee contended that no dividend income was received in that year, thus no addition should have been made. The CIT(A) directed the Assessing Officer to verify the dividend income received. The Tribunal noted the argument that no dividend income was earned in the relevant year. The Tribunal found that the dividend was received in the financial year 2012-13, not in the year ending 31.3.2012, and therefore, it was not taxable in the Assessment Year 2012-13. The assessee had declared the dividend income for the assessment year 2012-13 in the following year, which was accepted by the Revenue.The Tribunal also observed that the Assessing Officer had erred in treating the amount recorded in a dividend warrant in Sri-Lankan currency as the dividend income of the assessee. The Tribunal held that the addition made on account of dividend income was without any basis and documentary evidence. Since it was established that the assessee did not receive any dividend income in the relevant year, the Tribunal directed the Assessing Officer to delete the addition. The Tribunal concluded that once the dividend income issue was resolved, the other grounds of appeal raised by the assessee became academic and did not require separate adjudication. The Tribunal found no error, let alone an error of law, in the impugned order, and consequently dismissed the Appeal.In summary, the Tribunal upheld the deletion of the addition of dividend income as the assessee did not receive any dividend income during the Assessment Year 2012-13. The Tribunal found the Revenue's addition to be without basis and directed the Assessing Officer to delete it. The Tribunal's decision was based on the fact that the dividend income was received in the subsequent financial year and not in the year under consideration.