2010 (11) TMI 1016 - AT - Income Tax

Summary

Issues involved: The judgment involves the interpretation of section 80M of the Income-tax Act, 1961 regarding the deduction of dividends received from Master shares of Unit Trust of India (UTI) by the assessee for Assessment Years 1995-96 and 1996-97.

For A.Y. 1995-96:
The appeal was filed against the order of the CIT-I Pune dated 15-3-2000 passed u/s 263 of the Act for A.Y. 1995-96. The CIT held that the assessee was entitled to deduction at 40% instead of 100% for dividends received from Master shares of UTI. The assessee argued that Master shares should be considered as dividend from other companies and entitled to 100% deduction u/s 80M. The Tribunal analyzed the Mutual Fund (Subsidiary) Unit Scheme 1986 and the provisions of section 80M, concluding that the CIT's order was justified as the scheme was under the umbrella of UTI, making the assessee eligible for deduction only at 40%.

For A.Y. 1996-97:
The appeal challenged the disallowance of deduction u/s 80M for dividends received on Master shares of UTI. Revenue Authorities held that Master shares were part of UTI unit schemes and not distinct for deduction purposes. The Tribunal upheld the decision, stating that the dividend from Master shares was not entitled to deduction u/s 80M. Consequently, the disallowance of deduction for the assessee in respect of dividend received on Master shares of UTI was deemed justified, leading to the dismissal of both appeals.

Separate Judgment:
No separate judgment was delivered by the judges in this case.

Conclusion:
The Tribunal upheld the CIT's decision for both A.Y. 1995-96 and 1996-97, ruling that the assessee was entitled to deduction at 40% for dividends received from Master shares of UTI. The appeals were dismissed, and the disallowance of deduction u/s 80M for the assessee in respect of dividend received on Master shares of UTI was deemed justified.