ITA No. 793/Mum/2012, (Assessment Year: 2003-04). Case: The New India Assurance Company Limited Vs Commissioner of Income Tax-I. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA No. 793/Mum/2012, (Assessment Year: 2003-04) |
| Counsel | For Appellant: Shri Farrokh V. Irani and For Respondents: Shri Pravin Kumar |
| Judges | Dinesh Kumar Agarwal, Member (J) and Sanjay Arora, Member (A) |
| Issue | Income Tax Act, 1961 - Sections 115-O, 115-O(1, 115-O(5), 139(1), 143(3), 147, 148, 148(2), 14A, 80-M, 80M |
| Judgement Date | February 20, 2013 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Sanjay Arora, Member (A), (ITAT Mumbai 'B' Bench)
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This is an Appeal by the Assessee agitating the Order by the Commissioner of Income Tax (Appeals)-2, Mumbai ('CIT(A)' for short) dated 14.11.2011, dismissing the assessee's appeal contesting its assessment for the assessment year (A.Y.) 2003-04 u/s. 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) vide order dated 30.11.2010.
1.1 It would be relevant to recount the background facts of the case. The assessee, a public sector company, filed its return of income for the year on 17.11.2003, which was taken up for being subject to the verification procedure under the Act. The profit and loss account for the year, filed along with, was found to contain a provision for Rs. 40 crores toward the proposed final dividend as well as the corresponding dividend distribution tax at Rs. 512.50 lakhs (PB pg. 1). The return being filed manually, the challan for the payment of dividend to the account of the Central Government, at the proposed sum of Rs. 40 crores (on 10/10/2003), as also for the payment of the additional income-tax on distribution of dividend, at the applicable rate of 12.5% of the dividend (plus surcharge @ 2.5%) on 03.10.2003, was enclosed along with (PB pgs. 25, 26). The assessee was during the course of the assessment proceedings questioned in respect of the exemption claimed on the dividend of Rs. 40 crores, and also qua the expenses, if any, claimed there against (PB pgs. 27-28). Vide its letter dated 15.02.2005, it was clarified by the assesse-company that the deduction in respect of the dividend was being claimed only u/s. 80-M of the Act; it being in receipt of dividend at a higher sum of Rs. 113.87 crores (PB pg. 11). Further, the proportionate amount of expenses incurred by its investment department for the relevant year by its investment department, when reckoned with reference to the total income generated by the said department, would work out to Rs. 21 lakhs on an income of Rs. 74.34 crores, including the said dividend of Rs. 40 crores (PB pg. 29). finally framed u/s. 143(3) of the Act on 23.02.2005 by making a disallowance at the said amount of Rs. 21 lakhs u/s. 14A, while allowing deduction u/s. 80-M at the claimed amount of Rs. 40 crores (PB pgs. 30-37).
Notice u/s. 148 was subsequently issued on 26.03.2010. The assessee responded on 31.03.2010, stating that its return filed earlier (on 17.11.2003) may be treated as the return filed in response thereto. At the instance of the assessee, the copy of the reasons recorded u/s. 148(2) was supplied to it by the Assessing Officer (A.O.) vide his letter dated 13.11.2010 (PB pgs. 40-41). The same states that the dividend distribution by the company being after 31.03.2003, the same is hit by section 115-O...
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