Claim u/s 80M of Income Tax Act Allowable when Deduction of Amount was Equal to Dividend Distributed within Due Date: ITAT

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) ruled in favor of Purnasons Pvt. Ltd, holding that the claim under Section 80M of the Income Tax Act, 1961 is allowable if the deduction amount equals the dividend distributed within the due date. \r

Despite the disallowance by the CPC and the CIT(A), the ITAT found that the assessee had received a dividend of Rs. 37,12,500 from another domestic company and distributed Rs. 30 lakh to its shareholders before the due date. Section 80M exempts inter-corporate dividends from tax when received from a domestic company before April 1, 2020. \r

The two-member Bench allowed the assessee's appeal, noting compliance with the statutory requirements.