TaxTMI 
TaxTMI 
2013 (7) TMI 625
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....tion under Section 80M of the Income Tax Act, 1961?" 2. We have heard learned counsel for the parties on the aforesaid question and proceed to dictate our judgment. 3. Respondent is a domestic company wholly owned by the Government of NCT of Delhi and the Assessment Year involved is 1993-94. The assessee had disclosed income of Rs.14,26,29,843/- during the assessment year in question. Deduction under Section 80M of the Income Tax Act, 1961 (Act, for short) was claimed on the ground that the assessee had received dividend of Rs.50,00,000/- in this year from Unit Trust of India (UTI). The Assessing Officer disallowed the claim for deduction under Section 80M observing that the respondent-assessee had not produced evidence in support of ....
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....tion of the Revenue is that each assessment year is a self contained and as dividend of Rs.48,72,518/- related to Financial Years 1990-91 and 1991-92, deduction under Section 80M cannot be allowed on the basis of dividend income of Rs.50,00,000/- received in the Financial Year 1992-93. This is because the dividend distributed was for Financial Years 1990-91 and 1991-92 and deduction under Section 80M was claimed for the year ending 31st March, 1993. 7. Ex facie, there appeared to be some merit in the contention raised by the appellant-Revenue but on deeper scrutiny, we do not find that ground or justification is made out to interfere with the order of the tribunal. Section 80M as it existed and applicable to the Assessment Year 1993-94 w....
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....he assessment year commencing on the 1st day of April, 1995,and no deduction shall be allowed on such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1996, and any subsequent previous year. (2) Where any deduction, in respect of the amount of dividend distributed by the domestic company, has been allowed under clause (ii) of sub-section (1) in any previous year, no deduction shall be allowed in respect of such amount in any other previous year. (3) Where the dividend distributed is in respect of any period comprised in the previous year ending on the 31st day of March, l99O, no deduction shall be allowed in respect of such dividend. Explanation.--For the purposes of this se....
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.... which the dividend was received, the assessee company would be allowed a deduction of an amount equal to and not exceeding the amount of dividend distributed on or before the due date. Due date as per Explanation to Section 80M means the date of filing of return of income under Section 139(1). If we go by the order of the CIT (Appeals) and the tribunal, they have accepted the plea of the respondent-assessee that the dividend was paid to the shareholders of the assessee before due date vide cheques dated 31st March, 1993, which were encahsed on 21st April, 1993. 9. The requirement of the second part of Section 80M(1) is that the company, which has received dividend from a domestic company should have distributed dividend not exceeding th....
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....idends can be declared and are normally declared after the end of the financial year and when financial results are known. Payment of dividend in several cases may spill over and distribution can and does take in the subsequent year. 12. We are also inclined to accept the view of the respondent-assessee for another important reason, even if we feel that the contention of the Revenue is plausible. The reason is that Bombay High Court in Commission of Income Tax versus Saumya Finance and Leasing Co. P. Ltd, [2008] 300 ITR 422 (Bombay) has taken an identical view and this judgment was noticed and followed by the tribunal. Facts in the case of Saumya Finance and Leasing Co. P. Ltd. (supra) are almost similar though not identical. In the said....
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.... dividend income received by the assessee company would be permitted as a deduction only if it was redistributed as dividend to the shareholders. The emphasis was on the word "distribution" and not on the "period" to which the dividend paid related. The possibility of misuse of the said provision appears to be remote as normally dividends declared have to be paid within the statutory time limit fixed under the Companies Act, 1956 and violations invite punishment and penalty. This is a peculiar case of a Government company wherein dividend for Financial Years 1990-91 and 1991-92 got distributed on 23rd April, 1993, i.e. the date of encashment of cheques dated 31st March, 1993. We have also noted that the provision, Section 80M would become i....