TMI Blog2024 (2) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... same is dismissed. Levy of Dividend distribution tax (DDT) at the rate of 20.36% u/s 115O - claim of assessee that it should have been levied at the rate of 15% in terms of Article 10 of DTAA between India and Thailand - HELD THAT:- As AR fairly admitted that this issue is decided against the assessee by the Special Bench in case of Total Oil Limited [ 2023 (4) TMI 988 - ITAT MUMBAI (SB) ] where it is held that dividend distribution tax is an additional tax charged on the distributed profits of the company and not on the shareholder. The learned Departmental Representative also agreed with the same. As decision of Total oil Limited [SB] has held that shareholders have nothing to do with the levy of DDT on distributed profits of the company. List of shareholders, their beneficial interest in the dividend and residential status of the shareholder as per DTAA are not produced before us. It has also not been established before us that even otherwise the claim is in time or not and further whether the sources country [India] has to cede its right of taxation or not. Therefore, all these issues remain unexamined at all stages. - Shri Vikas Awasthy, JM And Shri Prashant Mahari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with later on. 04. Brief fact of the case shows that assessee is a company engaged in the business of civil construction, mining and specialized engineering in construction activities. It undertakes construction of dams, bridges, port, airport and heavy constructions. The assessee obtains contracts including Government contract through tenders and further carries out projects throughout India. 05. Assessee filed its return of income on 4th December 2018 at ₹ nil, as per normal provision of the Act and book profit under Section 115JB of the Act was computed at ₹113,18,95,000/-. The return of income was picked up for scrutiny. Assessee has claimed deduction under Section 80 IA of the Act of Rs 28892 lakhs. . 06. The learned Assessing Officer, on scrutiny, passed assessment order on 23rd April, 2021, wherein i. Disallowance under Section 14A of the Act was made of ₹57,490/- under normal computation and it was also added to the book profit u/s 115 JB of the Act. ii. The assessee claimed deduction under Section 80IA of the Act of ₹28,982 lacs in respect of 16 different projects. The learned Assessing Officer noted that the deduction could be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astructure facilities or not with respect to certain contracts. He found that assessee is entitled for deduction for part of the contracts. Accordingly, he allowed deduction partly. Accordingly, out of the total disallowance of deduction of ₹28,982 lacs, he allowed the deduction of ₹11,47,19,144/- and confirmed the balance disallowance of ₹278,35,71,856/-. iii. With respect to the claim of deduction of dividend distribution tax of ₹24,89,192/-, assessee submitted that as per Article 10 of India-Thailand treaty, the rate of tax on dividend is 10% and therefore, the claim of the dividend distribution tax should be accordingly allowed. The learned CIT (A) rejected the claim holding that dividend distribution tax is payable by the company and not by the shareholders and further the provision of Double Taxation Avoidance Agreement does not apply. iv. The assessee also raised ground regarding disallowance under Section 36(I)(va) of the Act of ₹1,97,740/-, which was rectified by the learned Assessing Officer vide order dated 3rd June, 2021, was also disallowed relying on the decision of the Hon'ble Supreme Court in case of Checkmate Services (P.) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82,08,585 4. 41516BA Airport Director, Airport Authority of India 31,18,488 09. On this ground, assessee also made a prayer for admission of the additional evidence under Rule 29 of the ITAT Rules. In the application, assessee submitted that assessee has claimed deduction of ₹28,982/- lacs in respect of 16 projects on account of contracts entered with Government and non-Government parties. The learned Assessing Officer has disallowed the entire deduction claimed. The learned CIT (A) has deleted the disallowance to the extent of ₹11,47,19,144/- in respect of contract entered into with certain government entities. It was further stated that the partial disallowance confirmed by the learned CIT (A) is with respect to certain non-government contracts on the ground that assessee has failed to provide a documentary evidences. Now it is the claim of the assessee that contracts entered into with non-Government entities are originally awarded to them by the Government. It was also pointed out that on 26th October, 2021, there was a survey on the premises of the assessee resulting into se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph no.7.3, the learned CIT (A) specifically asked the assessee to produce the contract copies to ascertain whether the claim of the assessee falls within the parameter laid down under Section 80IA of the Act or not. Undoubtedly, assessee failed to produce the same before the lower authorities. Before us, it is submitted that assessee has submitted the scope of the work of the various contracts but could not submit the contract copies. It is stated that a survey took place on 26th October, 2021 and the case of the assessee were reopened for various assessment years and further transfer pricing proceedings of 7 years were going on. It is also the claim of the assessee that the contracts were placed in the godown and its retrieval was taking long time. It is also the fact that assessee has submitted sample copies of some of the contract showing the scope of work. The learned CIT (A) has rejected the claim of the assessee for this reason also. This is evident as per paragraph no.7.3 of the order. In paragraph no.7.3.5, he mentioned that assessee did not file the full particulars of the contracts before the learned Assessing Officer also. In view of the above facts it is evident th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed under the respective Act. This ground is already decided by the learned CIT (A) against the assessee relying on the decision of the Hon'ble Supreme Court. In absence of any argument by the learned Authorized Representative, same is dismissed. 017. Ground no.4 is with respect to the dividend distribution tax paid by the company at the rate of 20.36% under Section 115O of the Act, claim assessee that it should have been levied at the rate of 15% in terms of Article 10 of Double Taxation Avoidance Agreement between India and Thailand. As The learned Authorized Representative fairly admitted that this issue is decided against the assessee by the Special Bench in case of Total Oil Limited where it is held that dividend distribution tax is an additional tax charged on the distributed profits of the company and not on the shareholder. The learned Departmental Representative also agreed with the same. 018. We are of the view that decision of Total oil Limited [SB] has held that shareholders have nothing to do with the levy of DDT on distributed profits of the company. List of shareholders, their beneficial interest in the dividend and residential status of the shareholder as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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