SRIRAM CHITS (BANGALORE) LTD. (NOW KNOWN AS SHRIRAM CHITS (KARNATAKA) (P) LTD.) REP. BY ITS EXECUTIVE DIRECTOR MR. RONALD D. SOUZA Vs. THE ASST. COMMR OF INCOME TAX

JUDGEMENT

(1.) THESE appeals arise out of the common order of the Income Tax Appellate Tribunal passed in ITA. Nos. 957 to 960/Bang/2003 dated 2.9.2005 pertaining to the Assessment Years 1999 -2000, 2000 -2001, 2001 -2002 and 2002 -2006. The said appeals have been filed by the assessee by raising the following substantial questions of law: i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in rejecting the appellant's claim for exemption of the dividend on the principles of mutuality, on the ground that the appellant is a business concern? ii) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was correct in law in ignoring the fact that when the appellant subscribed to chit, it does so in its character as a subscriber?

(2.) THE facts leading to the filing of these appeals are that, the appellant which is a private limited company carrying on business of conducting chits, for the relevant assessment years, filed Its return of income and sought exemption of payment of tax on the Foreman's dividend on the basis of doctrine of mutuality on the ground that the appellant is a business concern. The Assessing Officer did not allow the said exemption and concluded the assessment under Section 143(3) of the Income Tax Act. Being aggrieved by the said order, the appellant assessee preferred an appeal before the Commissioner of Income Tax (Appeals) who upheld the disallowance of Foreman's dividend as liable to tax. As against the said order the appellant preferred an appeal before the Income Tax Appellate Tribunal.

(3.) WE have heard the learned Senior Counsel, Sri. Sarangan, for Sri. Ramamurthy, Advocate, for the appellant and Sri. M.V. Seshachala, learned Counsel for the respondent -revenue.