PHILCO EXPORTS PVT LTD,NEW DELHI vs. DCIT CPC, BANGALORE
What did the Tribunal hold?
The Tribunal held that if an income is otherwise exempt under Section 10, it cannot be taxed. The matter was restored to the Assessing Officer to examine the assessee's claim afresh.
What were the facts?
The assessee claimed an amount of Rs. 6,34,205/- as exempt under Section 10(34) of the Income Tax Act. The CPC added this amount as business income, and the CIT(A) upheld the addition due to inconsistency in the return.
What were the issues?
Whether the amount of Rs. 6,34,205/- is genuinely dividend income exempt under Section 10(34) and if the inconsistency in the return warrants disallowance.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI SAKTIJIT DEY
This is an appeal by the assessee against order dated 10.08.2020 of learned Commissioner of Income Tax (Appeals) 7, Delhi 7 Delhi pertaining to assessment year 2018-19.
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.
Therefore, it is very much necessary to examine the nature and character of Rs. 6,34,205/- added as business income. In case, the assessee is able to establish its claim that the aforesaid amount represents dividend income, which is exempt under section 10(34) of the Act, then no addition can be made. In view of the aforesaid, I restore the matter to the file of the Assessing Officer for examining assesee’s claim afresh. The assessee is directed to furnish the requisite documentary evidences to establish its claim that the amount in dispute represents dividend income which is otherwise exempt under section 10(34) of the Act. Accordingly, the issue is restored back to the Assessing Officer. Needless to mention, the Assessing Officer must provide reasonable opportunity of being heard to the assessee before deciding the issue.
In the result the appeal is allowed for statistical purposes.
More judgments on Section 10(34)
- Unnathan Shekhar, Mumbai vs ACIT Circle 15(1)(2), MumbaiITA 7930/MUM/2026[2013-14]Status: Disposed8 Oct 2026AY 2013-14
- Tata Consumer Products Limited, Kolkata vs A.C.I.T., Circle - 4(1), KolkataITA 1604/KOL/2024[2020-2021]Status: Disposed7 Oct 2026AY 2020-2021
- Ramkrishna Bajaj Charitable Trust, Mumbai vs Deputy Commissioner of Income-Tax, Circle…ITA 66/MUM/2026[2016-17]Status: Disposed29 Sept 2026AY 2016-17
- M/S. Jsw Infrastructure Limited, Mumbai vs Principal Commissioner of Income Tax…ITA 6051/MUM/2026[2020-21]Status: Disposed23 Sept 2026AY 2020-21
- Teck Consultancy and Services Private… vs ACIT, Central Circle 8(2), MumbaiITA 2166/MUM/2026[2016-17]Status: Disposed15 Sept 2026AY 2016-17
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