AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 1005
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....Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Years 2011-12 2. The assessee has raised the following grounds of appeal: 1. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 77,01,600/- made by the Assessing Officer u/s.69 of the I.T.Act,1961 on protective basis. 2. The learned Commissioner of Income tax (Appeals) has erred in confirming the action of the Assessing Officer in holding that Appellant had opened Bank account with Dena Bank, Harij and deposited his own cash of Rs. 77,01,600/- even though the Appellant has clearly stated in his statement recorded u7s.!31 of the Act by the A.O. that the said account has been operated by four persons nam....
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....ned investment under section 69 of the Act. As the word protective assessment implies that there was the substantive assessment in the case of the other assessee with respect to the same disputed income. But in the case on hand the addition was made in the hands of the assessee on protective basis only without making any addition on substantive basis in the hands of the other assessee. Therefore, in such a situation a question arises whether the assessment framed on protective base in the case of the assessee is sustainable in the eyes of law. Accordingly, a question was raised to the learned AR and the DR. 4. The ld. AR submitted that there cannot a valid protective assessment without having a substantive assessment. Therefore, the impu....
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....ntly but both of them do not have any association in the earning of such income. iii. There are 2 claimants in respect of a particular income but legally only one person can claim the ownership. iv. The income flows to one person but the same is received by another person. 6.1 In the above circumstances where the legal ownership of the income is under suspicion, the AO can resort to make the addition in the hands of 2 persons or more than 2 persons on the basis of protective and substantive basis. But the demand of tax is not enforceable in the case of protective assessment until and unless it changes its shape by becoming substantive assessment. 6.2 The concept of protective assessment also becomes important in a si....
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....tiny assessment nor any substantive additions were made in these cases:- (1) Shri. Sureshbhai Nathala! Thakkar AFBPT4625G (2) Shri. Sureshbhai Thakkar AEBPT7104Q (3) Shri. Jyotsanoben Sureshbhai Thakkar AEHPT2104H (4) Shri. Sunil Sureshbhai Thakkar AEHPT2106C Submitted for kind information Yours faithfully. (J.J. Raval) Income-tax Officer Ward-3, Patan 6.4 The facts of the present case are like this. The assessee has deposited cash of Rs. 77,01,600/- in his bank account which was subsequently transferred to the parties as discussed above through the mode of banking channel. Such amount of cash deposit was treated as unexplained investment in the hands of the assessee under the prov....
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....nt has to precede protective assessment." 6.7 We also note that the ITAT Jodhpur in the case of Ramesh Chand Premraj Soni (HUF) Vs. ACIT reported in 13 SOT 15 has held that if the substantive assessment in the case of the assessee is struck down being barred by time, the additions made in the protective assessment cannot survive. The relevant extract is reproduced as under: "In the instant case, there was no dispute with regard to the facts that all the additions, which were the subject-matter of appeal or for that matter that of assessment order passed under section 158BD in the case of the HUF were made on protective basis. All parallel additions were made in the case of 'R' individually. The assessment made under section 158B....