Protective addition for unexplained investment fails when the substantive addition is deleted and no correct assessee is identified.

Protective addition for unexplained investment under section 69 could not survive once the corresponding substantive addition in the group concern had been deleted on merits. The protective basis fell away because there was no finding that the assessee was the correct person in whose hands the addition should be made. With the substantive addition deleted and no contrary determination on the proper assessable entity, the protective addition was unsustainable. Other grounds, including those raised under Rule 27, became academic.

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Issues: Whether the protective addition made under section 69 on account of unexplained investment could survive when the corresponding substantive addition had already been deleted on merits.

Analysis: The protective addition was made in the assessee's hands while the corresponding substantive addition had been made in the hands of another group concern. Once the substantive addition had been deleted on merits and there was no finding that the assessee was the correct person in whose hands the addition ought to have been made, the basis for sustaining the protective addition ceased to exist. In view of the deletion of the substantive addition and absence of any contrary finding on the correct assessable entity, the protective addition could not be sustained. Any other grounds, including those raised under Rule 27, became academic.

Conclusion: The protective addition was rightly deleted and the assessee succeeded on the core issue.

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