Nalanda Entertainment & Resorts Pvt ... vs Assessee

ी िवजय पाल राव, याियक सद य, एवं ी डी. क णाकर राव, लेखा सद य के सम । BEFORE SHRI VIJAY PAL RAO , JM AND SHRI D. KARUNAKARA RAO, AM

आयकर अपील सं./I.T.A. No.1935/Mum/2011 ( िनधा रण वष / Assessment Year : 2007-08 )

M/s. Nalanda Entertainment बनाम बनाम/ Income Tax officer & Resorts Pvt. Ltd. Vs. Ward-2(2)(3) 5, Jolly Bhavan No.2, Ground Mumbai. Floor, 7, New Marine Lines, Churchgate Mumbai-400 020. थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABCN 2013 Q (अपीलाथ /Appellant) ... ( यथ / Respondent)

अपीलाथ ओर से / Appellant by : Shri Prakash Jhunjunwala यथ क! ओर से/Respondent by : Shri Premanand J. - DR

सुनवाई क! तारीख / Date of Hearing : 05/02/2015 घोषणा क! तारीख /Date of 13/02/2015 Pronouncement :

आदेश / O R D E R

PER VIJAY PAL RAO, JM:

This appeal by the assessee is directed against the order dated 18/01/2011 of CIT(A) arising from penalty order passed under section 271(1)(c) for the assessment year 2007-08.

2. In the assessment completed under section 143(3) an addition of Rs.25,88,013/- was made on account of deemed dividend under section 2(22)(e) of the Income tax Act. The AO has levied the penalty under section 271(1)(c) vide order dated 29th June, 2010 against the addition made on account of deemed dividend under section 2(22)(e).

2 ITA No.1935/M/11 3. We have heard the ld. AR as well as the ld. DR and considered the relevant material on record. At the outset we note that in the quantum proceedings the Tribunal has set aside the issue to the record of the CIT(A) for deciding the appeal of the assessee on merits after condoning the delay in filing the appeal before the CIT(A). We further note that for the assessment year 2008-09 an identical issue came before this Tribunal and the Tribunal in the quantum appeal in ITA No.6084/Mum/2011 for assessment year 2008-09 vide order dated 28/3/2012 has deleted the addition made by the AO under section 2(22)(e) in para-7 as under :-

"7. Thus respectfully following the principle and ratio laid down by the Hon'ble special bench in the case of ACIT vs. Bhaumik Colour (P) Ltd. (supra) and the Hon'ble Jurisdictional High Court in the case of CIT vs. Universal Medicare Pvt. Ltd. (supra), we hold that the addition of Rs.5401,948/- on account of deemed dividend cannot be sustained and thus the grounds of appeal of the appellant are allowed."

3.1 We further note that the share holding pattern remains same in both the assessment years i.e. 2007-08 and 2008-09. In view of the fact that the quantum appeal has been set aside to the record of CIT(A) and further for the assessment year 2008-09 an identical issue has been in favour of the assessee. The penalty levied against the addition on account of deemed dividend is not sustainable and hence deleted.

4. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 13/02/2015.

आदेश क! घोषणा खुले यायालय म* +दनांकः 13/02/2015 को क! गई ।

Sd/- Sd/- (D. Karunakara Rao) (Vijay Pal Rao ) लेखा सद य / ACCOUNTANT MEMBER याियक सद य / JUDICIAL MEMBER मुंबई Mumbai; +दनांक Dated 13/02/2015 व.िन.स./ Jv, Sr. PS 3

ITA No.1935/M/11

आदेश क ितिलिप अ िे षत/Copy षत of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु/(अपील) / The CIT(A)- 4. आयकर आयु/ / CIT

5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड2 फाईल / Guard file.

आदेशानुसार/ ार BY ORDER,

स यािपत ित //True Copy//

उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai.