Jasmina Trust Vs DCIT (ITAT Delhi)
Assessee, a trust registered u/s 12A, earned dividend income of Rs.25.51 lakh & claimed exemption u/s 10(34). AO treated the dividend as taxable, denied exemption & assessed income by invoking section 115BBDA, while CIT(A) partly upheld the addition by allowing basic exemption of Rs.10 lakh & taxing balance @10% u/s 115BBDA.
ITAT held that though proviso to section 10(34) was inserted by Finance Act 2016 w.e.f. 01-04-2017, section 115BBDA applies only to Individual, HUF or Firm. A Trust does not fall within the class of assessees covered by section 115BBDA. Since dividend is chargeable to tax u/s 115BBDA only in specified cases, proviso to section 10(34) cannot operate against a Trust. Consequently, dividend income continued to be fully exempt u/s 10(34) in hands of the Trust. ITAT deleted the entire addition & allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘the CIT(A)’ in short) dated 30.01.2025 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) in Appeal No. CIT(A), Delhi-17/10854/2019-20 against the assessment order dated 30.12.2019 passed u/s 143(3) of the Act for Assessment Year 2017-18.
