2006 (10) TMI 197 - AT - Income Tax

Appeal allowed as protective additions deleted for block period 1989-2000

The appeal challenged the CIT(A)'s order under s. 158BD r/w s. 158BC(c) for the block period of asst. yrs. 1989-90 to 1999-2000. The Tribunal found all ... Block Assessment Issues involved: The appeal challenges the order of the CIT(A) u/s 158BD r/w s. 158BC(c) for the block period covering asst. yrs. 1989-90 to 1999-2000.Legal Grounds Raised:1. Applicability of s. 158BD to HUF property.2. Lack of material for undisclosed income belief.3. Absence of reasons for notice under s. 158BD.4. Limitation period for the order.Facts:The assessee-HUF earns income from interest and has been taxed since asst. yr. 1995-96. The Karta of HUF operated a gold and silver business as an individual. A search u/s 132(1) was conducted at the HUF residence in July 1998, with a survey at the shop and business premises. Additions in this appeal were made protectively in the HUF's hands and substantively in the individual's hands. The Tribunal quashed the assessment on the individual due to limitation, upheld by the High Court.Crucial Point:Whether protective additions can stand when substantial additions are struck down.Decision:After thorough review, it was found that all additions in the HUF's case were protective, with substantive additions deleted due to limitation. As there were no surviving substantive additions, protective additions could not be upheld. The appeal was accepted, quashing the assessment order and deleting all additions. No need to address other grounds of appeal.Result:The assessment order was quashed in line with Tribunal and High Court decisions, leading to the deletion of all additions. The appeal of the assessee was allowed.