LINTAS EMPOLYEES CULTURAL ACTIVITIES TRUST ,MUMBAI vs. DCIT, CIRCLE 17(1), MUMBAI

In the instant case, the only grievance of the assessee, relates to the claim of the assessee in respect of dividend for mutual funds amounting to Rs. 8,42,268/- which was claimed as exempt by filing its return of income. However, the CPC vide intimation dated 25.11.2021 denied the said exemption claimed and therefore, the assessee preferred first appeal before the Ld. Commissioner challenging the said disallowance along with the disallowance of Rs. 2,38,899/- being interest from tax free bonds.

The Ld. Commissioner though allowed the claim of the assessee with regard to tax free bonds amounting to Rs. 2,38,899/- by directing the AO to verify the interest from tax free bonds and allow the claim if found correct, however, upheld the addition/disallowance of Rs. 8,42,268/- by holding that the said amount/dividend from mutual funds, which has been claimed by the assessee as exempt, has been made taxable from 01.04.2020. Therefore, the amount of Rs. 8,42,268/- is rightly adjusted by CPC. As for interest from tax free bonds, the same remains exempt from the concerned A.Y.

Whereas, the relevant proviso to Section 10(35) of the Act, read as under:

We further observe that Hon'ble Coordinate Bench of the Tribunal in the case of M/s. Lintas Employees Hobbies and Craft Trust vs. ITO, (ITA No. 1801 and 1802/Mum/2025), decided on 23.05.2025, has also dealt with identical issue and ultimately decided the same in favour of the assessee.

Thus, we are in concurrence with the learned Counsel for the assessee that in such scenario and in the context of the relevant provisions mentioned above, the addition/adjustment/disallowance made by the AO/CPC by intimation/order referred to above, which has subsequently been upheld by the ld. Commissioner by way of impugned order, is unsustainable. Hence, in view of the above, the addition/adjustment/disallowance is deleted.

In the result, assessee's appeal is allowed.