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of ITAT held that dividends paid to an entity enjoying absolute taxation immunity under Section 9 of Article VI of the International Finance Corporation Act, 1958 must be excluded from Dividend Distribution Tax computation under Section 115-O. The tribunal ruled that comprehensive statutory exemption extends beyond mere income to encompass all financial activities of the exempt entity. Applying DDT on dividends paid to tax-immune entities would create an anomaly whereby the dividend-paying company bears additional tax burden on distributions to recipients beyond India's taxing jurisdiction. Such construction would violate legislative intent enshrining immunity provisions and penalize statutory compliance. Sub-Section 1A of Section 115-O expressly contemplates reduction of amounts paid to exempt entities from DDT calculation. The assessee's claim for refund was allowed, establishing that dividends to absolutely immune international institutions must be excluded from DDT computation.
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