TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 393
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant Commissioner of Income Tax - 2(3), Mumbai dated 18 March 2013. By the impugned order, while disposing of an application for a stay of demand in the amount of Rs.1719.65 crores arising out of an order dated 31 January 2013 passed under Section 143(3) of the Income Tax Act, 1961, for Assessment Year 2010-11, the assessee has been called upon to deposit an amount of Rs.377.65 crores. This is apart from an adjustment which has been effected by the department in respect of two refunds respectively in the amount of Rs.49.56 crores payable to the assessee for Assessment Year 2008-09 pursuant to an order under Section 156 dated 28 February 2013 and an amount of Rs.518.30 crores payable for Assessment Year 2009-10 in pursuance of an order under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dividend income from mutual fund units 426,33,31,752 189,15,87,367 The Petitioner has now produced letters from all mutual funds that dividend distribution tax has been paid by them on dividends paid to the Petitioner. Accordingly, the reason given for denial of the exemption now has no basis. Disallowance of Interest u/s 36(1)(viia) 351,06,96,982 155,76,52,664 No opportunity was given to the Petitioner to explain why the said branches are "rural branches". However, even assuming that some branches are not "rural" as alleged, a deduction of 7.5% of the total income has still to be granted u/s 36(1) (viia) Disallowance u/s 14A 8,39,96,049 3,72,68,004 The Tribunal's judgement forthe earlier (pre Rule 8D) years that no disallowance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore the Hon'ble ITAT. Accordingly, the assessee will not be treated as assessee in default in respect the demand arising out of the said issues. However all refunds [both existing or arising subsequently] would be adjusted against the demand arising out of these issues." 8. The impugned order declining to grant a stay of recovery proceeds on the basis that, both on the issue of broken period interest and amortization of premium, there is a decision of the CIT (Appeals) in favour of the assessee for Assessment Year 2009-10. Yet what the department has done is to make an adjustment of the demand on these two grounds against the refunds which have been allowed to the assessee (both existing and subsequent). The impugned order suggests that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 15 March 2013 pointed out that Section 10(35D) does not require an assessee to establish that the mutual fund has paid dividend distribution tax. However, the assessee in this case has stated that it has obtained confirmation from the mutual funds to the effect that dividend distribution tax had been paid. The assessee stated that in a similar case in Assessment Year 2010-2011, where it had obtained confirmation letters, the assessing officer allowed the claim. Certificates issued by the mutual funds have been forwarded to the assessing officer on 18 March 2013 (Exhibit N). 10 The fourth item of disallowance is of interest under Section 36(1) (viia). On this aspect, the total disallowance is Rs.351.06 crores on the ground that the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the department in this manner merely because it is in possession of the funds belonging to the assessee to which the assessee is legitimately entitled to and has been granted a refund for Assessment Years 2008-09 and 2009-10. The making of an adjustment in these facts is totally arbitrary and contrary to law. As a matter of fact, the assessee has contended that it was also governed by the order of the Tribunal on both the issues. Even this aspect has not been considered by the assessing officer. 12 Similarly, on the disallowance of the exemption on dividend income, the assessee under cover of its letters dated 15 and 18 March 2013 has produced certificates of confirmation from the mutual funds to the effect that dividend distribution tax....