TMI Blog2011 (4) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the addition of ₹ 10,23,246/- made by the Assessing Officer on account of unclaimed dividend by ignoring the fact that the amount of unclaimed dividend was neither deposited by the assessee in Govt. account nor paid to the shareholders. 3. The facts of the case stated in brief are that the assessee is a cooperative society registered under Cooperative Societies Act 1965. During the course of assessment proceedings, the Assessing Officer noted that the assessee had shown unclaimed dividend of ₹ 10,23,246/- for different years. According to the Assessing Officer, whenever loan was given to a person, he was made member of the society and shares were issued to the loanee. On such shares, the dividend was payable by the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer had made addition on the ground that the amount of unpaid dividend was to be deposited in the Government account after certain period. In this case, there is no dispute that the amount of dividend paid has not been charged to P L account. It forms part of appropriation of income. Therefore, when the assessee paid dividend to the shareholders, the amount was not debited to P L account and, therefore, the provisions of Section 41(1) are not applicable as there is no cessation of liability. Therefore, in our considered opinion, Ld. CIT(A) was justified in deleting the addition. 6. The next issue for consideration relates to deleting of addition of ₹ 1,51,236/- made by the Assessing Officer on account of cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d charity was to be sent to the Government of U.P. as the Act. Therefore, addition on account of reserve made for charity donation could not be added as income of the assessee. He accordingly deleted the addition. 8. Before us, Ld. A.R. for the assessee submitted that after computation of net profit, the amount is appropriated by way of dividend, defence fund, building fund, depreciation of investment, charity fund etc. The amount is not charged to P L account and therefore, amount payable to the Government shown in the balance sheet cannot be added as income of the assessee. On the other hand, Ld. Sr. DR supported the order of the Assessing Officer. 9. We have hard both the parties and gone through the material available on re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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