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TMI Blog2023 (10) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provision of Section 10(34) of the Act, the dividends which are referred in Section 115-O of the Act, are exempt and as per Section 115-O, domestic companies are liable to pay Dividend Distribution Tax on the amounts declared as dividends, accordingly, any dividend declared/paid by a domestic Company on which DDT has been paid, is exempt u/s 10(34) of the Act. In the present case, the Company paying dividends to the assessee has duly paid DDT and, therefore, the assessee is entitle to treat the dividend as exempt u/s 10(34) - Thus, in our considered opinion, we find no error or infirmity in the order of the CIT(A) in deleting the addition - we dismiss the Appeal filed by the Revenue. - Shri N. K. Billaiya, Accountant Member And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. These CNCRPS were purchased by the assessee on 16.02.2009 for a sum of Rs. 24 crores. On 12.12.2014, these shares were redeemed and the Assessee received a sum of Rs. 24 crores as face value and total dividend of Rs. 27,72,22,273/-. The AO observed that the assessee was due to receive dividend of Rs. 19.60 crores @ 14% for the period from the date of purchase to the date of redemption and the assessee had received excess dividend of Rs. 8,12,22,273/- . The AO asked the assessee to reconcile this difference and the reason for receiving excess dividend. It was submitted by the assessee that at the time of allotment of the preference shares on 16.02.2009, i.e., financial year 2008-09, it was agreed that CNCRPS shall carry dividend @14% p.a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. The Ld. Departmental Representative relying on the Assessment Order sought for reversal of the finding the and the conclusion of the CIT(A). 6. Per contra, the Assessee's Representative relying on the findings and conclusion of the CIT(A), submitted that the Grounds of appeal of the Revenue is devoid of merit which requires to be dismissed. 7. We have heard both the parties and perused the material available on record. The Ld. CIT(A) while deleting the addition made by the A.O. held as under:- 5.3 I have considered the facts of the case and the submission made by the AR. It has been contended that the appellant had received the dividend of Rs. 27,72,22,273/- from JEPL on redemption of 14% Cumulative Non-convertibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it was done in accordance with section 106 of the Companies Act, 1956 and the resolution was passed on 23.04.2014. Accordingly, the appellant was paid dividend @ 14% compounded annually from the date of allotment. The company JEPL paid dividend distribution tax (DDT) u/s 115-0 of the Act. It is further observed that the AO has treated the additional dividend received by the appellant as taxable only on the ground that there is change in the terms conditions with respect to the issue of dividend. However, it is to be appreciated that the original terms conditions permitted amendment with the consent of at least 75% of the holders of these shares and the terms were amended by following the due process. Even otherwise, it is observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f terms and conditions as defined and agreed upon at the time of offer of the shares. The terms and conditions of the share certificate are as under:- (vi) CNRPS shall carry dividend @14% p.a.; vii) The said shares shall have preferential right to dividend and in case of winding up ( of the company, preferential right to repayment of capital; (viii) The holder of the said shares shall have a right to attend general meetings of the company and vote on resolution directly affecting their interest; (ix) All or any of rights and privileges for the time being attached to the said clauses of shares may, subject to the provisions of section 106 and 107 of the Companies Act, 1956 and whether the company is being wound up, be var ..... X X X X Extracts X X X X X X X X Extracts X X X X
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