Protective additions deleted when substantive assessments against primary entity already removed by tribunal

The ITAT Ahmedabad allowed the assessee's appeal regarding protective additions made for cash received against booking of shops in Kunj Mall. Since the substantive assessments against M/s Kunj Infrastructure Private Limited were previously deleted by ITAT in 2019, the tribunal held that protective additions in the assessee's hands cannot sustain when substantive additions have been deleted. Following established judicial precedents, the protective additions were consequently deleted.

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Issues Involved:
1. Reopening of the case u/s 147.
2. Addition of Rs. 2,72,00,000/- on a protective basis.

Summary:

Issue 1: Reopening of the case u/s 147
The assessee contended that the Ld. CIT (A) erred in law and on the facts of the case in confirming the action of the AO in reopening the case u/s 147 of the Act. The Tribunal noted that the substantive additions in the hands of M/s Kunj Infrastructure Private Limited were deleted by ITAT Ahmedabad, thus invalidating the protective assessment in the hands of the assessee.

Issue 2: Addition of Rs. 2,72,00,000/- on a protective basis
The assessee argued that the protective addition of Rs. 2,72,00,000/- made by the AO was not sustainable since the substantive additions in the hands of M/s Kunj Infrastructure Private Limited were deleted by ITAT Ahmedabad. The Tribunal observed that protective assessments cannot stand independently without substantive assessments. Citing various precedents, the Tribunal concluded that since the substantive additions were deleted, the protective additions in the hands of the assessee could not be sustained.

Conclusion:
The Tribunal allowed the appeal of the assessee, holding that the protective additions made in the hands of the assessee could not be sustained once the substantive additions were deleted. The appeal was thus allowed, and the order pronounced in the open court on 17-04-2023.

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