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2014 (5) TMI 313 - ITAT MUMBAIDenial of deduction u/s 80M on the ground that dividend was subject to dividend distribution tax u/s 115-O - Whether the provisions of section 115-O, which has been brought in the statute by the Finance Act, 2003, w.e.f. 1st April 2003, can be made to be applicable so to deny the statutory deduction u/s 80M of the Act – Held that:- The purpose and intent of section 115-O is entirely different inasmuch as it sought to tax the dividend at the time of declaration / distribution / payment and such payment of tax cannot be claimed as deduction under any section or any other provision – thus, the deduction is allowable u/s 80M to the assessee is not overridden by section 115-O as held by the AO as well as the CIT(A) – the claim of deduction u/s 80M is clearly allowable as all the conditions mentioned has been fully complied with. Distribution of dividend - Whether the dividend has been distributed from the profits of assessment year 2003-04 or not – Held that:- The assessee has distributed the same quantum of amount of dividend which was received in September 2002 to its shareholders on 29th October 2003 - The assessee had the time limit for such distribution up to the date of filing of the return of income - the presumption can be drawn that the dividend has been distributed out of the same quantum of dividend received only, unless something is brought on record that the said dividend income has been specifically used for some other purpose. This has not been controverted by the AO - he is only drawing a presumption that this amount of dividend distributed is out of the profits of the assessment year 2004-05 and not assessment year 2003-04 - There is no material on record to the conclusion of the AO, especially when in the original round of scrutiny proceedings u/s 143(3), the assessee’s contention has been accepted - the assessee’s claim of deduction u/s 80M is clearly allowable as the same is within the mandate of section 80M, as all the conditions mentioned stands fulfilled for which there is no dispute by the Department - provisions of section 115-O will not negate the assessee’s claim for deduction u/s 80M in the year, as the provisions of section 115-0 is for different purpose altogether – Decided in favour of Assessee.
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