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2004 (9) TMI 76 - PUNJAB AND HARYANA HIGH COURT"Whether Tribunal was right in law in allowing credit for tax deducted at source in respect of dividends diverted to the State Government by the assessee?" - From a perusal of the order of the Tribunal, it is clear that no tax was deductible at all on the portion of dividend diverted to the State Government as it is not assessable under the Income-tax Act. The entire tax deducted at source clearly pertains to the dividend payable to the assessee and it has been found as a fact that the entire burden of this amount had fallen on the assessee-corporation. The Tribunal has taken a possible view which, in our opinion, is the correct view in the facts and circumstances of the case. At any rate, it is quite evident that even if the Revenue were to succeed, the balance amount would still be refundable as no tax was deductible on the dividend payable to the State Government. Since the burden had been fully borne by the assessee, such refund would also go back to the assessee. Thus, the whole exercise would be an exercise in futility. – Thus, we answer the question in the affirmative, i.e., in favour of the assessee
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