Tribunal allows appeal, directs deletion of protective income addition, favoring Assessee.

The Tribunal condoned the delay in filing the appeal by the Assessee, attributing it to a genuine belief based on incorrect advice. The Tribunal directed the Assessing Officer to delete the protective addition of income from undisclosed sources made in the hands of the Assessee, as the substantive addition had been settled and accepted by M/s Saheli Developers. Verification of the settlement by M/s Saheli Developers was ordered, leading to the deletion of the protective addition. The decision favored the Assessee, allowing the appeal for statistical purposes.

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Issues:
1. Condonation of delay in filing appeal.
2. Addition of income from undisclosed sources on protective basis.
3. Verification of settlement and acceptance of substantive addition by M/s Saheli Developers.

Condonation of Delay in Filing Appeal:
The appeal by the Assessee was filed after the prescribed period of limitation. The Assessee sought condonation of the delay, stating that initial advice from the old counsel led to the belief that filing an appeal was unnecessary due to the protective nature of the addition. Later, upon realizing the potential impact if the substantive addition in another case was not sustained, the Assessee decided to file the appeal. The delay was attributed to a genuine belief based on incorrect advice. The Tribunal, considering the circumstances and the Assessee's submissions, condoned the delay of 64 days in filing the appeal.

Addition of Income from Undisclosed Sources on Protective Basis:
The Assessing Officer had made a protective addition of Rs. 1.29 crore in the hands of the Assessee. The Assessee contended that the substantive addition was made in the case of M/s Saheli Developers, where the Assessee was a partner, and that M/s Saheli Developers had accepted and settled the case by paying the due tax under the VSVS Scheme, 2020. The Assessee argued that since the substantive addition had been accepted by M/s Saheli Developers, the protective addition should not stand. The Tribunal, after considering the submissions from both parties and verifying the facts presented, directed the Assessing Officer to delete the protective addition at the hand of the Assessee, allowing the appeal for statistical purposes.

Verification of Settlement and Acceptance of Substantive Addition by M/s Saheli Developers:
The Revenue had urged for the matter to be restored to the file of the lower authority to verify if the substantive addition had been accepted and tax paid by M/s Saheli Developers. The Assessee also requested the same, emphasizing the need for verification before deciding on the protective addition. The Tribunal, after examining the orders of the lower authorities and the evidence provided, directed the Assessing Officer to confirm the acceptance and settlement of the substantive addition by M/s Saheli Developers and subsequently delete the protective addition made in the hands of the Assessee.

In conclusion, the Tribunal addressed the issues of delay in filing the appeal, the validity of the protective addition, and the verification of settlement by M/s Saheli Developers. The decision was made in favor of the Assessee, directing the Assessing Officer to delete the protective addition based on the acceptance and settlement of the substantive addition by M/s Saheli Developers.

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