TMI Blog2009 (4) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under section 80M was allowed routinely without any discussion and without examining its admissibility in the body of the order and further on finding that the payment of dividend tax was made by virtue of the provisions under section 115-O(5), the claim of the assessee under section 80M was not allowable. Thus, CIT-III, Mumbai was of the opinion that the said assessment order passed was erroneous and was also prejudicial to the interest of the revenue within meaning of section 263 of the Act. 4. After affording opportunity of being heard to the assessee and after considering the written submissions dated 15-11-2007 filed by the assessee, the CIT was of the opinion that deduction granted him to withdraw and, accordingly, the Assessing Officer was advised to revise the order. In the order, the CIT-III taxed not only the provisions of section 80M but also provisions of section 115-O(5). 5. Aggrieved with the same, the assessee filed an appeal before us. The case of the Revenue is that dividend income, which has been subjected to tax under sub-section (1) of section 115-O cannot be allowed as a deduction under the provisions of section 80M in view of the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to support the same, the learned Counsel has also relied on various Bombay Bench decisions of the Tribunal in the cases of Clarinet Investment Trading Co. [IT Appeal No. 403 (Mum.) of 2003], Eastin Hospitals Services (P.) Ltd. [IT Appeal No. 3985 (Delhi) of 2001]. On the contrary, the learned DR for revenue has argued stating that the said decisions are delivered in the context of section 80M only and not 115-O(5). Regarding application of mind by the Assessing Officer, the learned DR has mentioned that the said enquiry by the Assessing Officer was only with regard to the applicability of section 80M, and not the applicability of section 80M, read with section 115-O(5). 6. We have heard both the parties and perused the order of CIT-III, Mumbai and the 10 pages-long-assessment order as well as the paper book filed before us. As seen from the Revision Order of the CIT-III, the main ground for invoking the provisions of section 263 includes ( i ) allowing of the assessee s claim without any discussion in the body of the assessment order; and ( ii ) the Assessing Officer allowing the claim routinely without application of his mind; ( iii ) the provisions of section 115-O(5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led explanations furnished by the assessee, the order of the Assessing Officer cannot be called to be erroneous and prejudicial to the interest of revenue. Relevant observations in this regard are extracted hereunder: "that the ITO in this case had made enquiries in this regard to the nature of the expenditure incurred by the assessee. The assessee had given a detailed explanation in that regard by a letter in writing. All these were part of the record of the case. Evidently, the claim was allowed by the ITO on being satisfied with the explanation of the assessee. This decision of the ITO could not be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard." Thus, where the CIT may not agree with the view taken by the Assessing Officer while allowing the claim of the assessee but the view taken by the Assessing Officer cannot be called to be absurd and non-plausible/impossible view. It has been repeatedly held by the various High Courts and Apex Court that if two views are possible and Assessing Officer has taken one of it, such view cannot be revised under section 263 of the Income-tax Act. Similar view were expressed by the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the amount of income by way of dividends from another domestic company as does not exceed the amount of dividend distributed by the first-mentioned domestic company on or before the due date. (2) Where any deduction, in respect of the amount of dividend distributed by the domestic company, has been allowed under sub-section (1) in any previous year, no deduction shall be allowed in respect of such amount in any other previous year. Explanation . For the purposes of this section, the expression "due date" means the date for furnishing the return of income under sub-section (1) of section 139. 115-O Tax on distributed profits of domestic companies . (1) Notwithstanding anything contained in any other provisions of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003, whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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