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TMI Blog2014 (12) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... It is only u/s 205(1)(A) that the power to declare interim dividend has been conferred to the Board of Directors - it is only the interim dividend that can be declared by the Board of Directors - since the Annual General Meeting took place on 30.12.2004 and in the AGM ₹ 62 lakhs was declared and the dividend distribution tax thereon came to ₹ 7.75 lakhs - the assessee company was not liable to pay dividend distribution tax of more than ₹ 7.75 lakhs – order u/s 263 passed by the ld. CIT is not sustainable on merits - de hors any incriminating material when the assessment is not abated the addition u/s 153A is not sustainable – the same has also been held in Al Cargo Global Logistics Limited vs DCIT [2012 (7) TMI 222 - ITAT MUMBAI(SB)] - no assessment u/s 153A is sustainable - when assessment itself is not sustainable, no exercise of jurisdiction u/s 263 of the Act on such assessment is sustainable – thus, the order of the CIT is set aside – Decided in favour of assessee. - ITA No. 1762/Kol/2013 - - - Dated:- 11-12-2014 - Sri Mahavir Singh, JM And Sri Shamim Yahya, AM,JJ. For the Appellant Shri D.S.Damle, FCA For the Respondent Sri Vijay Kumar, CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the AGM of the appellant held on 30/12/2004 was only 5% instead of the recommended rate of 10% there was no shortfall in the payment of dividend distribution tax and in that view of the matter the order of the AO was neither erroneous nor prejudicial to the interests of the Revenue. 8) For that on the facts and in the circumstances of the case, the order of the CIT u/s 263 dated 22.03.2013 be set aside and/or cancelled. 9) For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 3. In this case in order passed u/s 263 of the Act on 22.03.2013 by the ld. CIT has observed that on examination of the records, I find that assessee had declared dividend of ₹ 1,24,00,000/-. Tax thereon was ₹ 15,50,000/-. But, the assessee had paid tax and interest of ₹ 8,10,262/- on 06.05.2005 (i.e. after 7 months) on the distributed dividend of ₹ 62,00,000/-. As per sub section (3) of section 115O tax was required to be paid on the declaration of any dividend. Therefore, the tax on distributed profit (declared) was required to be paid on the declared dividend. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot paid within the time allowed as per law, interest u/s 115P of the Income tax Act was also leviable in the assessment. IV. In view of all the facts above and provisions of law, I hold that the order dated 30.12.2010 u/s 143(3)/153A is erroneous and prejudicial to the interest of revenue, and set it aside on this limited issue. I, therefore, direct the A.O. to pass necessary orders in this case amending the assessment order dated 30.12.2010 on the basis of the above findings. He shall accord due opportunity of hearing and finalize the case at the earliest preferably within three months of this order. Against the above order the assessee is in appeal before us. 6. We have heard both the counsel and perused the records. The ld. Counsel of the assessee submitted that this exercise of jurisdiction u/s 263 of the Act has been made for an order which was passed u/s 153A/143(3) of the Act. He submitted that original order in this case was passed u/s 143(3) of the Act on 29,12,2006. The matter in that year also travelled to the Tribunal and the Tribunal had passed an order against departmental appeal in this case on 28.09.2009. Subsequently search was conducted on 30.04.2008. Pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee provided a sum of ₹ 15.5 lakhs in these accounts and Board of Directors have also recommended the same. Hence he submitted that provisions of section 115O of the Act are attracted and the assessee was liable to pay dividend tax of ₹ 15.5 lakhs. As regards the plea of the assessee that no incriminating material was found during the course of search the ld. DR submitted that the same is not relevant. Accordingly he submitted the order of ld. CIT is sustainable. 6.3. We have carefully considered the submissions and perused the records. It is undisputed fact of the case that the dividend proposed in the accounts by the Board of Directors on 31.03.2004 was ₹ 1.24 crores and the provision for dividend distribution tax thereon amounted to ₹ 15.5 lakhs. In the AGM of the company held on 30.12.2004 the dividend declared was ₹ 62 lakhs and the dividend distribution tax due was ₹ 7.75 lakhs. This was duly paid by the assessee company. Now we may gainfully refer to section 115O(1) and (3) of the Act : 115O(1) [Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT we find that submissions of the ld. Counsel of the assessee have adequate cogency. De hors any incriminating material when the assessment is not abated the addition u/s 153A is not sustainable. It is not disputed by the revenue that no incriminating material was found at the time of search. This is supported by the decision of the Special Bench of the Tribunal in the case of Al Cargo Global Logistics Limited vs DCIT (2012) 137 ITD 217 (SB)(Mum). 6.6. In this case the Special Bench has held that (1) in assessment that is abated AO retains original jurisdiction as well as the jurisdiction conferred on him by section 153A of the Act for which assessments shall be made for each of the six assessment years separately. (2) In other cases any addition to the income already been assessed the assessments u/s 153A of the Act will be made on the basis of incriminating material i.e. (a) books of accounts and other documents found in the course of search but not produced in the course of original assessment and (b) undisclosed income or property disclosed in the course of search. Admittedly the case before us is not the one where assessment is abated. It is also und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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