DCIT RG 5(3), MUMBAI v. SPACO CARBURETTORS (I) P. LTD, MUMBAI

ITA 3958/MUM/2009 | 2003-2004
Pronouncement Date: 11-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 395819914 RSA 2009
Assessee PAN AABCS5307E
Bench Mumbai
Appeal Number ITA 3958/MUM/2009
Duration Of Justice 2 year(s) 4 month(s) 18 day(s)
Appellant DCIT RG 5(3), MUMBAI
Respondent SPACO CARBURETTORS (I) P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted J
Tribunal Order Date 11-11-2011
Date Of Final Hearing 08-11-2011
Next Hearing Date 08-11-2011
Assessment Year 2003-2004
Appeal Filed On 23-06-2009
Judgment Text
1 ITA 3958/ M/2009 SPACO CARBURETTORS (I) P. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J BEFORE SHRI R.K. PANDA A.M. AND SHRI VIJAY PAL RAO J.M. ITA NO. 3958/MUM/2009 ASSESSMENT YEAR 2003-04 DY. COMM. OF INCOME-TAX RG. 5(3) R. NO. 573 5 TH FLOOR AAYAKAR BHAWAN M.K. ROAD MUMBAI 20. VS. M/S SPACO CARBURETTORS (I) P. LTD. 901 PRASAD CHAMBERS OPERA HOUSE MUMBAI 400 004. PAN AABCS5307E APPELLANT RESPONDENT APPELLANT BY SHRI D.S. SUNDER SIN GH RESPONDENT BY SHRI S.M. INAMDAR DATE OF HEARING 8.11.2011 DATE OF PRONOUNCEMENT ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DT. 11.05.2009 OF THE CIT(A)- V MUMBAI RELATING TO A.Y. 2003-04. 2. GROUND OF APPEAL NO. 1 BY THE REVENUE READS AS UNDE R:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ENTITL ED TO DEDUCTION U/S 80 M IN RESPECT OF DIVIDEND AMOUNTING TO RS. 22 55 342/- IGNORING THE FACT THAT THE DIVIDEND TAX WAS PAID AFTER 31.3. 2003 AND THEREFORE BY VIRTUE OF PROVISIONS OF SECTION 115-O(5) OF THE I.T. ACT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80 M. 2 ITA 3958/ M/2009 SPACO CARBURETTORS (I) P. LTD. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE CLAIMED DEDUCTION OF RS. 22 55 342/- U/S 80-M OF THE I.T. ACT. ACCORDING TO THE A.O. THE ASSESSEE DISTRIBUTED DIVIDEND AFTER 31 ST MARCH 2003 AND PAID THE DIVIDEND DISTRIBUTION TAX AS PER PROVISIONS OF SECTION 115-0 OF THE ACT. THEREFORE THE A.O. WAS OF THE OPINION THAT THE ASSESSEE COMPANY IS NOT ENTITLED T O ANY DEDUCTION U/S 80-M OF THE ACT. 3.1 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT TH E ASSESSEE RECEIVED DIVIDEND FROM OTHER COMPANIES DURING THE IMPUGNED A SSESSMENT YEAR. AS PER THE PROVISIONS OF SECTION 80-M OF THE ACT DEDUCTIO N U/S 80-M CAN BE CLAIMED IF THE COMPANY DISTRIBUTES DIVIDEND OF AN EQUAL AMOUNT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. IN THE INSTANT CASE T HE ASSESSEE COMPANY HAS DISTRIBUTED THE DIVIDEND RECEIVED BEFORE THE DUE DA TE OF FILING OF RETURN OF INCOME. IT WAS ARGUED THAT THE CLAIM OF THE A.O. TH AT SINCE THE ASSESSEE HAD PAID THE TAX AS PER PROVISIONS OF SECTION 115-0 OF THE ACT ON DIVIDEND DISTRIBUTED THE ASSESSEE CANNOT CLAIM DEDUCTION U/ S 80-M AS THE PROVISIONS OF SECTION 115-0(5) OF THE ACT IS NOT CORRECT. IT WAS FURTHER SUBMITTED THAT THIS IS PURELY A LEGAL ISSUE WHICH HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE AS PER THE FOLLOWING DECISIONS:- 1. CASTLE INVESTMENT & INDS. (P) LTD. V. ITO ITA NO . 1713/MUM./2006. 2. M/S KALKABOD BYRAMJEE & SONS AGENCY P. LTD. V. I TO ITA NO. 4102/MUM/2001 3. EASTIN HOSPITAL SERVICES P. LTD. V. DCIT ITA N O. 3985/DEL/01. 3.2 BASED ON THE ARGUMENTS ADVANCED BEFORE HIM AND IN THE LIGHT OF THE DECISIONS CITED BEFORE HIM THE LD. CIT(A) HELD THA T THE ASASESSEE IS ENTITLED TO DEDUCTION U/S 80-M OF THE ACT. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 3 ITA 3958/ M/2009 SPACO CARBURETTORS (I) P. LTD. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES PURSUED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE FACTS ARE NOT IN DISPUT E. WE FIND THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S CASTLE INV ESTMENT & INDS. PVT. LTD. VS. ITO IN ITA NO. 1713/MUM/2006 ORDER DTD. 18 TH JULY 2007 FOR A.Y. 2003-04 HAS CONSIDERED AN IDENTICAL ISSUE AND IT HAS BEEN H ELD IN THAT CASE THAT THE DEDUCTION U/S 80-M OF THE ACT IS IN RESPECT OF ANY INCOME RECEIVED BY WAY OF DIVIDENDS FROM ANOTHER DOMESTIC COMPANY INCLUDED IN THE GROSS TOTAL INCOME OF THE RECIPIENT COMPANY BUT SUCH DEDUCTION IS TO BE R ESTRICTED TO THE AMOUNT OF DIVIDEND DISTRIBUTED BY THE RECIPIENT COMPANY ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. THE TRIBUNAL IN THE SAI D DECISION HAS FOLLOWED VARIOUS OTHER DECISIONS OF THE TRIBUNAL. ON FURTHER APPEAL BY THE REVENUE WE FIND THE HONBLE JURISDICTIONAL HIGH COURT IN ITA N O. 1557 OF 2007 DISMISSED THE APPEAL FILED BY THE REVENUE BY HOLDING THAT NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THE APPEAL. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CASTLE INVESTM ENT & INDS. PVT. LTD. (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE LD. CIT(A) WE DO NOT FIND ANY INFIRMITY IN HIS ORDER ON THIS ISSUE. ACCORDINGLY THE GROUND RAISED BY THE REVENUE IS DI SMISSED. 5. GROUND OF APPEAL NO. 2 READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) ERRED IN HOLDING THAT NO INTEREST U/S 234D I S CHARGEABLE IGNORING THE FACT THAT THE ORIGINAL ASSESSMENT WAS COMPLETED AFTER 1.6.2003 THEN INTEREST U/S 234D WILL BE CHARGEABLE FROM THE DATE OF GRANTING REFUND AS HELD BY THE HONBLE ITAT BANGAL ORE IN THE CASE OF M/S SIGMA ALDRECH FOREIGN HOLDING COMPANY (104 ITD 95). 5.1 AFTER HEARING BOTH THE SIDES WE FIND THE A.O. C HARGED INTEREST U/S 234D OF THE ACT. BEFORE THE LD. CIT(A) IT WAS SUBMITTE D THAT INTEREST U/S 234D CAN BE CHARGED ONLY WITH EFFECT FROM A.Y. 2004-05 AND N OT FOR A.Y. 2003-04. THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF ITO VS. EKTA 4 ITA 3958/ M/2009 SPACO CARBURETTORS (I) P. LTD. PROMOTERS PVT. LTD. REPORTED IN 11 TTJ 289 WAS BROU GHT TO THE NOTICE OF THE LD. CIT(A). BASED ON THE ARGUMENTS ADVANCED BEFORE HIM THE LD. CIT(A) HELD THAT NO INTEREST IS CHARGEABLE U/S 234D OF THE ACT FOR T HE IMPUGNED ASSESSMENT YEAR. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 5.2 AFTER HEARING BOTH THE SIDES WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE A.O. FOR DECIDING THE ISSUE AFRESH IN T HE LIGHT OF THE UNREPORTED DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT V. BAJAJ HINDUSTAN VIDE ITA NO. 198 OF 2009 ORDER DTD. 15 TH APRIL 2009 AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND BY THE REVENUE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT APPEAL FILED BY THE REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 11.11.2011. SD/- SD/- (VIJAY PAL RAO (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 11.11.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) V MUMBAI 4. THE CIT MC-V MUMBAI 5. THE DR BENCH J 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 5 ITA 3958/ M/2009 SPACO CARBURETTORS (I) P. LTD. DATE INITIALS 1 DRAFT DICTATED ON 8.11.2011 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 8.11.2011 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER