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2022 (1) TMI 176 - ITAT BANGALOREAddition u/s 2(22) - Deemed dividend - receipt is in the nature of capital or not - whether the said amount was part of interim dividend declared the company on which dividend distribution tax was already paid - Whether assessee is not entitled to any exemption, in the absence of section 10(33)?- whether CIT(A) has erred in ignoring the provision of section 115-O of the Act as per which, payment of dividend distribution tax is considered as final payment of tax and thus, taxing the same under section 2(22) ? - HELD THAT:- Admittedly, the dividend income was received in the previous year relevant to assessment year 2003-2004. For the assessment year 2003-2004, the assessee was not entitled to exemption of dividend income in absence of section 10(33) of the Act (section 10(33) of the Act was omitted by the Finance Act, 2002). Moreover, the contention of the assessee that the impugned payment of ₹ 25 lakh is in the nature of capital in view of the fact that the company was under liquidation proceedings, and accordingly, such distribution will have to be taxable in accordance with section 46(2) of the Act is also devoid of any merits, because dividend was declared before liquidation and dividend distribution tax was paid u/s. 115-O of the Act by the company (dividend was declared on 05.07.1999 and dividend distribution tax was paid on 31.01.2001). Therefore, the provisions of section 46(2) of the Act do not have application to the facts of the present case. In the light of the aforesaid reasoning, we see no reason to interfere with the order of the CIT(A) and we uphold the same as correct and in accordance with law. Assessee appeal dismissed.
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