COMMISSIONER OF INCOME TAX vs. M/S S PRABHAKAR KAMATH

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 07TH DAY OF NOVEMBER, 2014 PRESENT THE HON' BLE MR.JUSTICE N.KUMAR

AND

THE HON' BLE MR.JUSTICE B.MANOHAR

ITA NO.356 OF 2012 BETWEEN

1.THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD, BANGALORE

2.THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2(1), C.R. BUILDING, QUEENS ROAD, BANGALORE ... APPELLANTS

(By Sri.K V ARAVIND- ADV.)

AND

M/S NAMDHARI SEEDS NO.119, 9TH MAIN ROAD, IDEAL HOMES TOWNSHIP, RAJARAJESHWARI NAGAR, BANGALORE ... RESPONDENT

(By M/s. A SHANKAR & M LAVA- ADVS.)

THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 21/05/2012 PASSED IN ITA NO.384/BANG/2011, FOR THE

ASSESSMENT YEAR 2007-2008, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.384/BANG/2011 DATED 21/05/2012 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), BANGALORE.

THIS APPEAL COMING ON FOR HEARING THIS DAY, N.KUMAR J., DELIVERED THE FOLLOWING:

ORDER

The Revenue has preferred this appeal challenging the order passed by the Tribunal which has set aside the order passed in a proceeding initiated under Section 263 of the Income Tax Act,1961. The question involved is, whether deemed dividend is to be taxed at the hands of the shareholder or the firm? 2. In the assessee’s case, in ITA No.488/2013 dated 30.4.2014 it is held that the dividend should be taxed in the hands of the shareholder and not the firm. In view of the said judgment, the order passed under Section 263 of the Income Tax Act, 1961 has been

rightly set aside by the Tribunal. Therefore, we do not see any merit in this appeal. Accordingly, it is set aside.

Sd/- JUDGE.

Sd/-

JUDGE