M/S. RALLIS INDIA LTD ,MUMBAI vs DCIT, 8(1)(1), MUMBAI

Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY

For Appellant: Shri M.M, Shri Shubhay Jathan

For Respondent: Shri Annavaram Kosuri, Sr. AR

Hearing: 14.01.2026Pronounced: 23.01.2026

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI“D” BENCH, MUMBAI

BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER

ITA No. 7254/MUM/2025(AY: 2021-22) ITA No. 7255/MUM/2025(AY: 2023-24)

M/s. Rallis India Ltd. vs. The Dy. Commissioner of Income Tax- C/o Kalyaniwalla and Circle-8(1)(1), Room No. 624, 6th Floor, Mistry LLP, 2nd Floor, AayakarBhavan, M.K. Road, Esplanade House, Mumbai-400020. 29, Hazarimal Somani Marg, Fort, Mumbai-400001. PAN/GIR No:AABCR2657N (Appellant) (Respondent)

Appellant by Shri M.M. Golwala and Shri Shubhay Jathan Respondent by Shri Annavaram Kosuri, Sr. AR Date of Hearing 14.01.2026 Date of Pronouncement 23.01.2026 O R D E R PER VIKRAM SINGH YADAV, AM:

These two appeals are filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi *‘Ld.CIT(A)’+, dated 27-09-2025, pertaining to Assessment Years (AYs.) 2021-22 & 2023-24, wherein the assessee has taken the following grounds of appeal: ITA No. 7254/M/2025 “1) The Appellant objects to the demand raised of Rs. 35,59,770/-. 2) Both lower authorities erred in not granting the Appellant, credit for Tax deducted at source to the tune of Rs. 71,407/- deducted by Yes Bank Limited (TAN: MUMY01286F). 1

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

3) The learned Commissioner of Income Tax (Appeals) erred in dismissing the Appellant company's appeal by holding that the ground agitating the denial of TDS credit of Rs. 71,407/- does not require adjudication. 4) The learned Commissioner of Income Tax (Appeals) erred in holding that the ground regarding interest u/s 234C does not require adjudication and further erred in holding that the levy of interest u/s 234C is consequential. 5) The learned Commissioner of Income Tax (Appeals) erred in not considering that interest had been levied u/s 234C ignoring the proviso below section 234C(1)(b). 6) Having regard to the facts and circumstances of the case and the provisions of law, the Appellant submits that interest u/s 234C cannot exceed Rs.65,40,275/-in any view of the matter and the Ld. Assessing Officer be directed to restrict the said interest accordingly.” ITA No. 7255/M/2025 “1) Both lower authorities erred in not reducing the "profits and gains from business and profession" by Rs.6.76,000/-. 2) Both lower authorities failed to consider that dividend income of Rs.6,76,000/-had been doubly taxed, once under "Income from Other Sources" and once under the head "Profits & Gains from Business & Profession" 3) The learned Commissioner of Income Tax (Appeals) failed to consider the finding of the Assessing Officer that she proposed to reduce business income by Rs.6,76,000/- but that she failed to actually do so while computing taxable income. 4) Both lower authorities erred in not allowing deduction of Rs.6,76.000/- u/s 80M of the Act.”

In ITA No. 7254/M/2025, the first ground of appeal relates to non-grant of TDS credit to the tune of Rs. 71,407/- deducted by Yes Bank Ltd. In this regard, the ld. AR submitted that the assessee in its return of income has claimed TDS credit of Rs. 47,48,366/-. However, the AO has allowed the TDS credit only to the extent of Rs. 45,89,077/-. It was submitted that Form-26AS as updated reflects the TDS credit of Rs. 71,407/- deducted by Yes Bank Ltd. and the corresponding interest income has already been offered to tax in the return of income. It was submitted that the said TDS credit has been wrongly disallowed by the AO without specifying any reasons. It was further submitted that the assessee has

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

taken the said ground of appeal before the ld. CIT(A) and the ground of appeal so raised by the assessee has been dismissed and at the same time, the direction has been given to the AO to verify its contention from the original records in terms of AST data, Form-26AS, etc. and take necessary appropriate action as per law. It was submitted that since the ground of appeal so raised by the assessee has been dismissed by the ld. CIT(A), the assessee by way of an abundant caution has taken this ground of appeal and therefore, appropriate direction may be issued to the AO to allow the necessary TDS credit to the assessee.

In ground no. 2, the assessee has challenged the wrong computation of interest u/s. 234C of the Act. In this regard, it was submitted that the assessee in its return of income has computed interest u/s. 234C amounting to Rs. 65,13,000/-. It was submitted that once the correct TDS credit is allowed and after considering the proviso to section 234C, the interest liability can only increase to Rs. 65,40,275/-. In this regard, it was submitted that the assessee has duly submitted copy of the statement given date-wise details of the capital gains accrued on sale of mutual funds as well as the statement giving date-wise details of flats sold along with copy of the sale deed to demonstrate the dates on which the capital gains has actually accrued. It was submitted that the assessee cannot estimate accrual or receipt of the sale consideration in respect of capital gains till the time it has accrued and therefore interest u/s. 234C cannot be levied where the appellant could not have anticipated such income. It was submitted that the additional interest liability u/s. 234C amounting to Rs. 34,30,431/- has been presumably computed by disregarding the quarter wise accrual of capital gains as shown by the assessee in its return of income. Further reliance was placed on the decision of the Co-ordinate Bench in case of Gautam

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

Vinod Daftary Vs. DCIT (ITA No. 7220/M/2013 dated 29.07.2015) and decision of the Hon’ble Rajasthan High Court in case of CIT Vs. Prem Lata Jalani [2003]264 ITR 744 (Rajasthan HC) wherein it has been held that the ability to pay advance tax in such peculiar cases will only arise after the transaction has taken place. It was further submitted that the assessee has specifically taken this ground of appeal before the ld. CIT(A). However, the ground has been dismissed summarily by the ld CIT(A) for the reason that the levy of interest u/s. 234C is mandatory and is consequential in nature. It was submitted that the assessee is not disputing the levy of interest u/s. 234C of the Act. It is only the quantum of interest which has been excessively levied on the assessee which has been contested and it was accordingly submitted that as against the interest liability of Rs. 99,44,370/- so computed by the AO, the interest liability comes to only Rs. 65,40,275/- and therefore appropriate directions may be given to the AO to recomputed the interest liability u/s 234C of the Act.

The ld. DR has been heard, who has relied on the order passed by the lower authorities.

We have heard the rival contentions and purused the material available on record. Firstly, as regard non-grant of TDS credit of Rs 71,407/- , it is the claim of the assessee that the same related to TDS on interest credited by the Yes Bank ltd, the interest income has been duly offered in the return of income, the TDS stand reflected in Form 26AS. The AO is accordingly directed to verify the same and where the same is found to be in order, allow the necessary credit to the assessee. The ground of appeal is thus allowed for statistical purposes.

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

Coming to the matter relating to levy of interest u/s 234C of the Act, admittedly, the assessee challenge is limited to the quantification of interest levied u/s 234C of the Act and not to the levy of interest u/s 234C of the Act. In this regard, it has been submitted that necessary effect of TDS as well as proviso to section 234C in relation to capital gains has not been properly considered by the AO while computing the interest liability though all relevant information is available as part of the return of income and other documentation placed on record. We find that where admittedly, the assessee has shown capital gains in its return of income, the quantification of interest u/s 234C has to necessarily take into account the proviso to section 234C which specifically envisages the matter relating to estimation of income in the nature of capital gains and payment of advance tax in relation thereto. Considering the same, the matter is remitted to the file of the AO to recompute the interest u/s 234C taking into consideration the TDS as well as the proviso to section 234C of the Act. The ground of appeal is thus allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.

ITA No. 7255/M/2025

During the course of hearing, the ld. AR submitted that the assessee company has offered dividend income of Rs. 6.76 lakhs under the head “profits and gains from business and profession” wherein the AO has brought it to tax under the head “income from other sources”. It was further submitted that in the process, the AO has taxed the dividend income under the head “income from other sources” and at the same time, he has failed to reduce the amount

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

already offered to tax under the head “profits and gains from business and profession” which has resulted in double taxation of the same amount of dividend income. In this regard, our reference was drawn to the findings of the AO which are contained in para 4.2 of the assessment order wherein the AO has stated that the dividend income of Rs. 6,76,000/- reported under “income from business/profession” is proposed to be reduced and to be classified under the head “income from other sources”. Further our reference was drawn to the final computation of income wherein the AO has taken the returned income and thereafter has added dividend income of Rs. 6,76,000/- and assessed income has been determined at Rs. 17,73,152,560/- which clearly shows that the AO seeks to reclassify the income, however, instead of reclassifying, the same amount has been brought to tax again resulting in double addition which may be directed to be deleted.

It was further submitted that the assessee has made a claim towards deduction u/s. 80M amounting to Rs. 6.76 lakhs during the appellate proceedings before the ld. CIT(A). However, the said claim has not been allowed by the ld. CIT(A). In this regard our reference was drawn to the submissions made before the ld. CIT(A), wherein it was submitted as under: “In any event, the assessee company has declared a dividend of Rs. 58.34 crores on 15th June 2023 for the Financial Year ended 31/3/2023 and Rs. 58.34 crores on 24th June 2022 for the Financial Year ended 31/03/2022, therefore, the Assessing officer ought to have allowed a deduction u/s 80M of the Act of Rs.6.76,000/-. Therefore, its is requested that a deduction of Rs.6.76 lacs may please be allowed. In support of the assessee company's contention, attention is invited to the Annual Report of the Appellant company attached as Annexure C. specifically internal page 54, on perusal of which, it may be observed that dividend of Rs. 58.34 crores has been paid. Under these circumstances, it is requested that the deduction u/s 80M of the Act of Rs.6.76 lacs may please be allowed though the same was inadvertently 6

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

not claimed in the Return of Income. It is submitted that the same was not claimed merely due to inadvertence and oversight. The Appellant places reliance on the decision of the Bombay High Court in the case of Siva Equipment P Lid v. ACIT (423 ITR 20) and in the case of CIT v. Pruthvi Brokers & Shareholders Pvt Ltd (349 ITR 336), wherein, inter alia, the jurisdictional High Court has held that the Ld. CIT(A) has the powers to adjudicate fresh claims in the appellate proceedings even when the said claims were not raised by way of a revised return or during the course of assessment proceedings. Therefore, the Appellant requests your Honour to please direct the Ld. AO to allow the deduction of Rs.6.76 lacs u/s 80M of the Act. It may be noted that the decision of the Bombay High Court in the case of Siva Equipment P Ltd (supra) also considers the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd.” 10. It was submitted that the ld. CIT(A) has denied the claim of the assessee for absence of documents evidencing distribution of dividend. In this regard, it was submitted that the assessee has duly submitted the annual report of the assessee company where therein a clear mention of the dividend payout date as well as the passing of the resolution by the shareholders in its meeting held on 15.07.2023. However, given that the actual dates of the dividend distribution were not available, the ld. CIT(A) has denied the claim of the assessee company. In this regard it was submitted that the assessee wishes to place on record a management certificate which confirms that the dividend income received during the relevant previous year was actually distributed to the shareholders within the statutory time limit prescribed u/s. 80M of the Act. It was submitted that the non-filing of the certificate before the ld. CIT(A) was neither deliberate nor with any intent to withhold material facts, but occurred due to bonafide belief that the relevant information was available in the audited accounts filed with the return of income. Referring to the certificate, it was submitted that the assessee has confirmed that in respect of financial year ended 31.03.2023, it was proposed by the Board of Directors at the meeting held on 25.04.2023 to pay dividend of Rs. 2.5 per share on equity share of Rs. 1 each. The total outflow

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

towards the dividend on equity shares for the year was Rs. 48.62 Cr. Further it has been certified that the said dividend was approved by the shareholders at the annual general meeting held on 15.06.2023 and thereafter the said dividend was paid out on 20.06.2023. It was accordingly submitted that the assessee’ claim of deduction u/s 80M may be directed to be allowed.

11.

The ld. DR has been heard, who has been relied on the order passed by the lower authorities.

12.

We have heard the rival contentions and perused the material available on record. Firstly, we find merit in the contention of the ld AR that the dividend income has been brought to tax twice – firstly as part of the income under the head “profits and gains from business and profession” as offered in the return of income and thereafter, under the head “income from other sources” as done by the AO while computing the income which has resulted in double addition which cannot be sustained. The AO is accordingly directed to reduce the dividend income of Rs 6,76,000/- from the head “profits and gains from business and profession”. The ground of appeal is thus allowed.

13.

As far as claim of deduction u/s 80M is concerned, we find that the statute provides that where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of dividends received from such other domestic company as doesn’t exceed the amount of dividend distributed by it on or before the due date as so

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

defined. In the instant case, the assessee’s income includes the dividend income of Rs 6,76,000/- and it has made the claim u/s 80M of an equivalent amount stating that it has distributed dividend to the extent of Rs. 48.62 Cr on 20.06.2023 well before the due date as so specified and necessary documentation has been placed on record. We therefore find merit in the claim of the assessee that it is legally eligible for claim of deduction u/s 80M of the Act. The ld CIT(A) has also not disputed entertaining the said claim during the appellate proceedings. As far as verification of claim of distribution of dividend on or before the specified due date is concerned, the assessee has placed on record a management certificate wherein it has certified the dividend distribution date of 20.06.2023 which supports the assertion as so made in the annual report where it is provided that the dividend shall be paid on or before 20.06.2023. We therefore allow the claim of deduction u/s 80M and the matter is set-aside to the file of the AO for the limited purposes of verification of claim of distribution of dividend in terms of quantum and date of payment before the specified due date and where the same is found to be in order, allow the necessary deduction to the assessee. The ground of appeal is thus partly allowed for statistical purposes.

14.

In the result, the appeal of the assessee is partly allowed for statistical purposes. Order is pronounced on 23.01.2026

Sd/- Sd/- (RAHUL CHAUDHARY) (VIKRAM SINGH YADAV) JUDICIAL MEMBER ACCOUNTANT MEMBER Anandi.Nambi(Steno) MUMBAI Date: 23.01.2026

ITA No.7254 & 7255/MUM/2025 M/s. Rallis India Ltd.

Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI

M/S. RALLIS INDIA LTD ,MUMBAI vs. DCIT, 8(1)(1), MUMBAI