January 2023
The second proviso to section 10(34) categorically states that dividends received on or after 1st April, 2020 alone would be subjected to tax. In the instant case, since the dividend was received during F.Y. 2019-20 relevant to A.Y. 2020-21, there is no case for taxing the said dividend during the year under consideration i.e. A.Y. 2020-21
49. Manmohan Textiles Ltd. vs. National Faceless
Appeal Centre
I.T.A. No. 1884/Mum. /2022 (Mum.-Trib.)
A.Y.: 2020-21
Date of order: 6th September, 2022
Sections: 10(34), 154
The second proviso to section 10(34) categorically states that dividends received on or after 1st April, 2020 alone would be subjected to tax. In the instant case, since the dividend was received during F.Y. 2019-20 relevant to A.Y. 2020-21, there is no case for taxing the said dividend during the year under consideration i.e. A.Y. 2020-21.
FACTS
The assessee filed its return of income, declaring a loss of Rs. 1,40,712. The return of income was processed, determining the total income to be Rs. 1,05,850. While processing the return, a dividend of Rs. 2,46,859 claimed to be exempt u/s 10(34) in the return of income was treated as taxable.
Aggrieved by the addition, the assessee filed a rectification application to the CPC, who dismissed the application and upheld its earlier action.
Aggrieved, the assessee filed an appeal to CIT (A). The CIT (A) observed that dividend income is not exempt and has become taxable. He upheld the action of the CPC in taxing the dividend income.
Aggrieved, the assessee preferred an appeal to the Tribunal.
HELD
Having gone through the provisions of section 10(34), the Tribunal noted that the same is amended by the Finance Act
