DCIT Vs Reliance Industries Limited (ITAT Mumbai)
Dividend from Mutual Funds Cannot Be Treated as Bogus u/s 68 – SEBI Confirmation Consistent ITAT View Upheld
AO treated ₹615.81 Cr dividend received from JM Balanced Fund & JM Equity Fund as unexplained cash credit u/s 68 (r.w.s. 115BBE), alleging sham transactions based on survey on fund manager. CIT(A) deleted the addition.
ITAT upheld CIT(A) and held:
- Identity, source & genuineness established: Dividend received from identifiable mutual funds through banking channels
- SEBI (regulator) confirmed no violation: SEBI clarified that no misuse of reserves for dividend – allegation fails
- No evidence of sham transaction: AO relied only on general survey findings, without scheme-specific proof
- Consistent ITAT rulings in similar JM Fund cases: Additions already deleted in multiple cases – judicial consistency followed
- Sec 68 not applicable: Nature & source of income clearly explained – cannot be treated as unexplained credit
Accordingly, addition of ₹615.81 Cr deleted. Revenue appeal dismissed; assessee’s cross objection became infructuous
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the Revenue and cross-objections by the Assessee are directed against order dated 25.03.2025 passed by the Commissioner of Income-tax (Appeals), NFAC, [in short the ‘CIT(A)’) for Assessment Year 2018-19
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