Protective wealth assessment requires prior substantive assessment in another person's hands; matter remitted for fresh factual finding.

Protective inclusion of wealth in an assessee's hands is sustainable only where the same wealth has first been assessed substantively in another person's hands. The High Court found that the lower orders had not recorded any definite finding on whether the properties were so assessed, leaving the foundational fact unresolved. As the material on record was insufficient to answer the reference on merits, the matter was remitted to the Tribunal for fresh consideration and a finding on substantive assessment in the hands of any other person.

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Issues: Whether a protective inclusion of wealth in the assessee's hands was permissible only if the same wealth had first been assessed substantively in the hands of another person, and whether the matter required fresh factual determination.

Analysis: The orders below did not record a definite finding on whether the concerned properties had been brought to tax substantively in the hands of any other person. Protective assessment is sustainable only when there is such a substantive assessment elsewhere. In the absence of clear material on this foundational fact, the existing findings were insufficient for answering the reference on merits.

Outcome: The questions were not answered on merits and the matter was remitted to the Tribunal for fresh consideration and a finding on whether the properties had been included in the hands of any other person substantively.

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