Case Law Details

Case Name : District Cooperative Bank Limited Vs ACIT (ITAT Delhi)
Appeal Number : ITA Nos. 2984/Del/2013 & 2985/Del/2013
Date of Judgement/Order : 08/08/2014
Related Assessment Year :
Courts : All ITAT (4213) ITAT Delhi (925)

Dividend is not exempt under Section 10(34) read with Section 115-O because the companies from whom the assessee received the dividend has not paid dividend distribution tax. His claim is that the dividend received by the assessee company is exempt on account of mutuality because those companies which paid dividend to the assessee are also either cooperative banks or the companies which are basically rendering services to the cooperative societies.

We are unable to accept the contention of the assessee. When the assessee claims any exemption on the ground of mutuality, the burden is upon the assessee to establish so. In this case, the learned counsel could not justify how the dividend received by the assessee from three different companies is covered under the concept of mutuality. The assessee has received the dividend on account of assessee’s investment in those companies. The dividend is not the contribution to the assessee by those companies and moreover, the assessee is not rendering services to them. In view of the above, we hold that the assessee’s contention that dividend received from those companies is exempt on account of mutuality is untenable. The same is rejected.

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0 responses to “Dividend Taxable if Company from whom it received has not paid dividend distribution tax”

  1. Rajesh, Mumbai says:

    Sales Tax Department says If Vat (sales Tax) is not paid by seller, purchaser will not be allowed set off.

    On same Line, Now Dividend distribution Tax will have to be paid Investor if not paid by company.I do not understand why DDT is payable when The Company has already paid Income Tax on Profit and dividend is distributed out of Post Tax profits.No one protests hence government continues looting people.with DDT, Effective Income Tax Rate for companies goes up to 42.65%.

    Law makers make people fool by making complicated laws. When there is already 30.9% taxes on net profit of companies.Why should there be repeat tax on Post tax profits?.Once taxes are paid at 30.9% rate, Why there is repeat tax (DDT) on balance 69.1%.

    Tomorrow’s News (Laws).

    If You are buying (Shopping) household stuffs and seller do not pay Vat, it will be collected from you (consumers).For example, you are buying washing Machine from Mall and if seller collects 12.5% Vat from you but does not pay, it will be collected from you.

    You are paying / depositing stamp duty to bank on property purchase but if Bank does not pay to the government, it will be collected from you.

  2. VENKAT says:

    It is not taxpayer’s responsibility if dividend tax is not collected. it is government’s responsibility. how do I know whether the company has paid divided tax or not?

  3. Anonymous says:

    ^Sandeep Jha: Through Dividend Warrants

  4. Sandeep Jha says:

    Dividend Taxable if company from it received has not paid dividend distribution tax..

    my question is how receiver can understand whether dividend distribution tax has deposited or not by the issuing co.??

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