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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘A’
Before: SHRI RAJPAL YADAV & SHRI PRADIPKUMAR KEDIA
Assessee by : None Revenue by : Shri Aditya Shukla, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 06/08/2019 घोषणा क� तार�ख /Date of Pronouncement: 7/08/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-10, Ahmedabad dated 8.12.2014 passed for the Asstt.Year 2007-08.
Sole grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of Rs.8,00,000/- which was added by the AO on protective basis.
Brief facts of the case are that the assessee has filed her return of income on 4.4.2008 declaring total income at 2 Rs.1,23,310/-. The return was processed under section 143(1) on 6.4.2009. The DDIT(Invt) has transmitted an information that the assessee had made investment of Rs.8.00 lakhs for purchase of shares of Adarsh Engintech Projects P.Ltd. during the assessment year 2006-07. On the strength of information transmitted by the DDIT, the ld.AO has formed reason and reopened the assessment by issuance of notice under section 148 of the Act on 19.10.2010. In response to the notice, Shri V.K. Moondra, CA duly authorized by the assessee appeared before the AO. In response to the show cause notice, it was pleaded by the assessee that source of investment of Rs.8.00 lakhs in the above share capital of Adarsh Engintech Projects P.Ltd. is the amount given by the company to her. She just received commission for above accommodation at 2% of the share application money. This commission was actually Rs.16,000/-. The ld.AO has observed that ACIT, Cir.2, Udaipur has made addition of this amount in the hands of the company for the Asstt.Year 2007-08, and therefore he added this amount on protective basis in the hands of the assessee. The finding recorded by the AO in this connection reads as under:
“4.2 In view of the above, the source of investment of Rs. 8.00 lacs in purchase of shares of Adarsh Engitech Projects Pvt Ltd remains unexplained and required to be added u/s 69 of the Act to the total income of the assessee. Since, the ACIT, Circle-2, Udaipur has made the addition of said amount considering that the same belongs to the company while passing the order for the A. Y. 2007-08 u/s 143(3) of the Act on 31/12/2009 in the case of Adarsh Engitech Projects Pvt Ltd and to avoid double taxation of the same amount and for natural justice, an addition of the amount of Rs. 8.00 lacs is made on PROTECTIVE BASIS to the total income of the assessee. Penal proceedings u/s.274 r.w.s. 271(l)(c) of .the Act are initiated for concealing the particulars of her income.”
4. Dissatisfied with the addition, the assessee carried the matter in appeal before the ld.CIT(A). The ld.CIT(A) in principle concurred with the AO but observed that in future if substantive addition in the hands of the company i.e. Adarsh Engintech Projects P.Ltd. is confirmed finally, then the addition made in the hands of the assessee shall stand deleted. The AO may accordingly take appropriate action at that stage if so required. On the last date of hearing, we have appraised the ld.counsel for the assessee to furnish the details about status of the assessment in the case of Adarsh Engintech Projects P.Ltd. whether this addition has been confirmed or not by higher appellate authority. He has also directed to produce copy of ITAT, Jodhpur Bench’s order, if any. Neither the ld.counsel for the assessee has appeared on the date of hearing nor submitted any such details.
5. The ld.DR pointed out that similar additions have been made in the case of Smt.Kamalbe L. Rathod and Neelanebn A. Rathod. The Tribunal has remitted the issue back to the AO for re- adjudication. He has placed on record copy of the Tribunal’s order passed in and 2486/Ahd/2011.
With the assistance of the ld.DR, we have gone through the record carefully. In the case of similarly situated two assessees i.e. Smt.Kamlaben L. Rathod and Smt.Neelaben A. Rathod, the Tribunal has considered this issue as under:
“3. Brief facts are - both the assessees allegedly made above investments in one company M/s Adarsh Engitech Projects Pvt Ltd, Udaipur. On the basis of AIR information, it was found that Shri Shantilal Jain, the Director of M/s Adarsh
4 Engitech Projects Pvt Ltd has built-up some capital with the help of the name-lenders including these two assessees.
3.1. Ld. Counsel for the assessees states that the said Shri Shantilal Jain has accepted all these amounts as his money and the assessees are as name-lenders. Ld. Counsel for the assessees, however, could not give the latest status of the fate of substantive additions in the hands of the Shri Shantilal Jain, Director of M/s. Adarsh Engitech Project Pvt Ltd. Ld. Counsel for the assessees further contends that since Shri Shantilal Jain in substantive capacity has accepted the addition, the impugned assessment being protective in nature, this addition should be deleted. 3.2 Ld. DR, on the other hand, vehemently contends that Id. Counsel has not laid any evidence to suggest that the additions in question have become substantive in the hands of Shri Shantilal Jain and the relevant income-taxes have been paid. Therefore, the additions should be confirmed in the hands of these assessees.
I have heard the rival contentions, perused the material available on record and gone through the orders of the lower authorities. From the record, it emerges that the additions have been made in the hands of Shri Shantilal Jain; however, whether the appeals have been filed and the amounts have been disputed by Shri Shantilal Jain has not been brought on record. The substantive assessment is in the hands of Shri Shantilal Jain and protective assessment is in the hands of these two assessees. Considering all these facts and circumstances, I find it fit to set aside these assessments back to the file of the Id. AO and direct him to decide the same afresh after examining the finality of the additions in the hands of Shri Shantilal Jain.
Since the only issue being restored back to the file of the ld. AO, the limitation will not apply till the verification in the case of Shri Shantilal Jain is done.”
There is no disparity on facts. The ld.CIT(A) has already directed the AO to find out the status of the additions made on substantive basis. Considering the above aspects and the order of the ITAT, we are of the view that ends of justice would be met if 5 we remit this issue back to the file of the AO with a direction that the ld.AO shall decide what happen in the hands of Adarsh Engintech Projects P.Ltd. or any other assesees about these sums, and thereafter decide whether protective addition require to be made in the case of the assessee or not. In view of the above discussion, the appeal of the assessee is allowed.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 7th August, 2019.