2017 (5) TMI 1699 - AT - Income Tax

Claim of exemption u/s.10 (34) in respect of dividend income - Claim of depreciation to assessee trust - HELD THAT - The issue under consideration is squarely covered by the decision of Bombay High Court in the case of Jasubhai Foundation 2015 (4) TMI 305 - BOMBAY HIGH COURT . CIT(A) after considering the decision of Bombay High Court has directed the AO to allow assessee s claim of exemption u/s.10(34) of dividend income received during the year after due verification. No infirmity in the order of CIT(A) for the direction so given by the AO which is in terms of decision of the jurisdictional High Court in case of Jasubhai Foundation (supra). Appeal of the Revenue is dismissed.

Summary

Issues involved: Appeal against order of CIT(A) regarding deletion of disallowance of depreciation claim.

Analysis:
1. The Revenue filed an appeal against the CIT(A) order for the A.Y.2012-13 concerning the disallowance of the assessee's claim of depreciation.

2. The facts revealed that the assessee, a trust registered under various sections, filed its return of income declaring total income at Rs. Nil. The AO completed the assessment disallowing exemption u/s. 10(34).

3. The CIT(A) directed the AO to allow the assessee's claim of exemption u/s. 10(34) in respect of dividend income received during the year after due verification. The CIT(A) considered various judgments, including those of Hon. ITAT Mumbai and Hon. Bombay High Court, supporting the exemption u/s. 10 irrespective of the allowance of deduction u/s. 11.

4. The appellant relied on judgments emphasizing that income exempt u/s. 10 cannot be taxed under sections 11 to 13 of the Act. The CIT(A) upheld the exemption of dividend income under sections 10(34), 10(35), and 10(38) based on the decisions cited.

5. The Revenue appealed the CIT(A) order, arguing that the issue was covered by the decision of the Bombay High Court in the case of Jasubhai Foundation. The ITAT upheld the CIT(A) order, stating that there was no infirmity in allowing the exemption u/s. 10(34) based on the High Court's decision.

6. Consequently, the ITAT dismissed the Revenue's appeal, affirming the CIT(A) order to allow the assessee's claim of exemption u/s. 10(34) for dividend income received during the year.

This detailed analysis covers the issues involved in the legal judgment comprehensively, outlining the arguments presented, the judgments cited, and the final decision rendered by the ITAT.