| |
| The Tax Publishers2020 TaxPub(DT) 2896 (Del-Trib) INCOME TAX ACT, 1961
Section 10(34) Section 10(35)
When company in which SARA Fund had invested, already paid additional income tax on dividend earned as required under section 115-O, SARA fund was not required to pay additional income tax second time on the same income. While making payment of dividend and, therefore, dividend received by assessee from SARA fund was eligible for deduction under section 10(34).
|
Exemption under section 10(34) - Share of dividend received from VCF - Disallowance on the ground of non-payment of additional tax under section 115-O by VCF -
Assessee claimed exemption under section 10(34) on its share of dividend income out of dividend income received by SARA Fund (venture capital Fund-VCF). AO denied exemption on the ground that assessee could not grow tax-free income under sections 10(34) and 10(35) unless additional tax had been paid as per section 115-O and as such exemption claimed under sections 10(34) and 10(35) could be allowed only if dividend income was distributed as per section 115-O and 115R.Held: Conditions laid down under section 115-O to avail of exemption under section 10(34), is to be complied with at the level of venture capital undertaking and not at the stage when investor, i.e., assessee in the instant case, received dividend income from VCF. So, assessee was entitled for exemption under section 10(34) its share of dividend income was out of dividend income received by SARA fund. When company in which SARA Fund had invested, already paid additional income tax on dividend earned as required under section 115-O, SARA fund was not required to pay additional income tax second time on the same income. Accordingly, denial of exemption was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09 & 2010-11
INCOME TAX ACT, 1961
Section 56
 SUBSCRIBE FOR FULL CONTENT
|