TaxTMI 
TaxTMI 
2023 (10) TMI 271
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.... case and in law in deleting the addition of Rs. 8,12,22,273/- made by A.O. on account of excess dividend received by assessee. 2. The Ld. CIT(A) has erred in not appreciating the facts that assessee has evaded the taxes by resorting to a colorable device as is evident from the facts of the case and the transaction carried by the assessee. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing." 3. Brief facts of the case are that, the assessee shown exempt income of Rs. 33,93,22,840/- which included a sum of Rs. 27,72,22,273/- on account of dividend received from the company M/s Jubilant Enpro Pvt. Ltd. (JEPL). The AO called for the details of this dividend received from JEPL. It ....
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.... the Companies Act. The AO held that there is a clear violation of the terms specified in the MOA of JEPL and therefore, treated the excess dividend of Rs. 8,12,22,273/- as income of the Assessee and has made the addition. 4. Aggrieved by the assessment order dated 27/12/2017, the assessee preferred an appeal before the CIT(A), the Ld. CIT(A) vide order dated 19/01/2018 deleted the addition of Rs. 8,12,22,273/- made by the A.O. on account of excess dividends received by the assessee. As against the order of the CIT(A), the Department of Revenue filed the present appeal on the grounds mentioned above. 5. The Ld. Departmental Representative submitted that the CIT(A) erred in deleing the addition of Rs. 8,12,22,273/- made by the A.O. on acco....
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....l; (viii) The holder of the said shares shall have a right to attend general meetings of the company and vote on resolution directly affecting their interest; (ix) All or any of rights and privileges for the time being attached to the said clauses of shares may, subject to the provisions of section 106 and 107 of the Companies Act, 1956 and whether the company is being wound up, be varied, modified, abrogated or dealt with either with consent in writing of the holders of not less than three-fourth of the issue of that class or by a special resolution passed at a separate general meeting of the holders of shares of that class. (x) The shares were redeemable on/ before 20 years from the date of allotment. It is also observed that the ....
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....view of these facts, I am of the opinion that the objection of the AO regarding the modification in terms & condition regarding the issue of dividend is not valid. Even if, there is some violation at the end of JEPL which has paid dividend to the appellant, the dividend cannot be taxed in the hands of the appellant as dividend distribution tax has been paid on this amount and there cannot be double taxation of the same amount. Accordingly, it is held that the entire dividend received by the appellant is exempt u/s 10(34) of the Act and therefore, the addition made by the AO is deleted and the grounds of appeal are allowed." 8. It is found that the assessee received dividend of Rs. 27,72,22,273/- from M/s Jubilant Enpro Pvt. Ltd. (JEPL) on ....
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....said alteration of the terms and conditions was done in accordance with Section 106 of Companies Act and also a Resolution was passed on 23/04/2014 to that effect, accordingly, the assessee was paid dividend at 14% compounded annually from the date of allotment. The Company JEPL paid dividend distribution taxes (DDT) u/s 115-O of the Act, the A.O. treated the additional dividend received by the assessee as taxable on the ground that there is a change in the terms and conditions with respect to the issue of dividend. It is worth to observe that the original terms and conditions are permitted to amend with the consent of at least 75% of the shares holders of these shares, which has been complied in the present case. As per the provision of Se....