PHILCO EXPORTS PVT LTD,NEW DELHI vs. DCIT CPC, BANGALORE

When the appeal was called for hearing, none appeared on behalf of the assessee, despite proper service of hearing notice evidenced by the postal acknowledgment kept on record. In view of the aforesaid, I proceed to dispose of the appeal ex parte qua the assessee after hearing the Learned Departmental Representative and based on material available on record. The dispute in the present appeal is confined to addition of an amount of Rs. 6,34,205/-, which according to the assessee is exempt under section 10(34) of the Income Tax Act 1961.

Briefly, the facts are the assessee is a resident corporate entity. While processing the return of income filed by the assessee for the impugned assessment year, the Centralised Processing Centre (CPC), Bangalore added back an amount of Rs. 6,34,205/- as income from business and profession. Against the addition so made, the assessee preferred an appeal before learned Commissioner (Appeals). However, Learned Commissioner (Appeals) upheld the addition made by the CPC.

I have considered the submissions of learned Departmental Representative and perused the material on record. As could be seen from the impugned order of learned Commissioner (Appeals), though, before him the assessee had contended that the amount of Rs. 6,34,205/- represents dividend income and exempt under section 10(34) of the Act, however, assesee’s claim was rejected on the ground that there is inconsistency in the claim of exempt income as per the information given in the return of income. In my view, if a particular item of income is otherwise exempt from taxation under section 10 of the Act, it cannot be brought to tax.

In the result the appeal is allowed for statistical purposes.