Dismissed appeal: 25,00,000 deemed dividend income taxed under section 2(22).

The appeal was dismissed, affirming the CIT(A)'s decision to add &8377; 25,00,000 as deemed dividend income received from IPF Breeders Pvt. Ltd. The Tribunal held that the payment was not exempt under section 10(33) of the Act for that year and should be taxed under section 2(22). The Tribunal also ruled that the payment was not a return of capital but dividend income subject to tax, as it was received before liquidation proceedings and dividend distribution tax was paid. The appellant's arguments were rejected, and the appeal was dismissed.

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Issues:
1. Appeal against CIT(A)'s order dated 30.10.2018 for the assessment year 2003-2004.
2. Disallowance of dividend income received from IPF Breeders Pvt. Ltd.
3. Addition of &8377; 25,00,000 under section 2(22) of the Act.
4. Interpretation of provisions of section 115-O of the Act.
5. Treatment of payment of &8377; 25,00,000 in the course of liquidation proceedings.
6. Taxability of dividend income in absence of section 10(33) of the Act.
7. Application of section 46(2) of the Act to the case.
8. Comparison with the decision regarding refund of equity share capital in another case.

Analysis:
1. The appeal was filed against the CIT(A)'s order dated 30.10.2018 for the assessment year 2003-2004. The grounds raised by the appellant included opposition to the order, lack of sufficient opportunity to be heard, and errors in confirming the action of the Assessing Officer regarding dividend income from IPF Breeders Pvt. Ltd. The appellant argued that the payment of &8377; 25,00,000 was part of interim dividend on which dividend distribution tax was already paid, and therefore, should not be taxed under section 2(22) of the Act.

2. The Assessing Officer added &8377; 25,00,000 as deemed dividend income, which was received during the relevant financial year. The CIT(A) upheld this addition, stating that in the absence of section 10(33) of the Act for that year, the appellant was not entitled to any exemption for the dividend income. The Tribunal had earlier directed the AO to verify the facts, and upon reassessment, the addition was again made. The A.O. justified the addition based on the absence of exemption under section 10(33) for that year.

3. The appellant argued that the impugned payment should be considered as a return of capital invested, not accumulated profits, and therefore should not be taxed under section 2(22) of the Act. However, the Tribunal held that the dividend income was received before liquidation, and dividend distribution tax was paid by the company, making the provisions of section 46(2) inapplicable. The Tribunal upheld the CIT(A)'s order as correct and in accordance with the law, dismissing the appeal.

4. The Tribunal considered the arguments presented by both parties, emphasizing the timing of dividend declaration, payment of dividend distribution tax, and the applicability of relevant sections of the Act. The Tribunal found no merit in the appellant's contentions regarding the nature of the payment and the taxability under different provisions of the Act. Ultimately, the appeal was dismissed, affirming the CIT(A)'s decision regarding the addition of the dividend income and the tax treatment applied.

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