TMI Blog2010 (11) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1. The CIT erred in passing the impugned order u/s 263 of the Act on the facts and in the circumstances of the case. 2. The CIT failed to appreciate that the impugned order was not in accordance with/in contravention of the provisions of sec. 263 and hence was beyond jurisdiction and/or was otherwise bad in law. 3. The CIT failed to appreciate that income by way of dividends from Master shares of ₹ 13,55,400/- were entitled to full deduction u/s 80-M of the Act. 4. The CIT erred in holding that deduction u/s 80M of the Act was allowable only in respect of 40% of dividend from Master shares. 5. The CIT erred in partly withdrawing the deduction i) the specific terms of the Mutual Fund (subsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit Trust of India Act 1963 wherein it was stated that under the said Act, section 32(3)(b) states that UTI shall be deemed to be a company. Similar provisions are also included in the Income-tax Act 1961. It was contended that master shares were issued not under the normal scheme of UTI but in pursuance of the amendment to the UTI Act, wherein the UTI was permitted to issue different schemes. It was stated that the Mutual Fund (Subsidiary) Unit Scheme 1986 of UTI was notified on 9-10-1986 under which different units were offered for subscriptions under the different issue documents. It was also stated that this Mutual fund was to be the subsidiary of UTI. The objectives of the investments from the Trust were also stated and it was urged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this background, the provisions of section 80-M of the Income-tax Act, 1961 was analyzed. The proviso to section 80M reads as follows: [Provided that where any domestic company receives any income by way of dividends from the units of the Unit Trust of India established under the Unit Trust of India Act 1963 (52 of 1963), such domestic company shall, subject to the aforesaid provisions, be eligible for deduction to the extent of (a) four-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April 1994 (b) two-fifth of such income in respect of the previous year relevant to the assessment year commencing on the 1st day of April 1995 and no deduction shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity as well as on merit. Accordingly the appeal of the assessee is dismissed. ITA No. 142/PN/2004 for A.Y. 1996-97 5. The issues raised in this appeal are as under. 1. The learned Commissioner of Income-tax (Appeals) [ CIT (A) } erred in law and on facts, in upholding the view of the learned Deputy Commissioner of Income-tax, Circle 8, Pune ( DCIT ) that units and Master shares issued by Unit Trust of India ( UTI ) are equivalent and thereby, in disallowing the deduction of ₹ 10,74,600 under section 80M of the Income-tax Act, 1961 ( the Act ) to Sandvik Asia Limited ( the Appellant ) in respect of dividend received on Master shares of Unit Trust of India (UTI). The CIT(A) ought to have held that divide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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