INCOME TAX OFFICER 1 2 1, MUMBAI vs. LAND ENERGY & RESOURCES LIMITED, MUMBAI

ITA 3714/MUM/2026Status: DisposedITAT Mumbai29 September 20266 pages

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that a protective addition cannot result in the same income being ultimately subjected to tax in the hands of two different assessees. In this case, the AO made the addition protectively in the assessee's hands, while the substantive addition was made in the hands of Shri Mohnish Mohan Mukkar. The CIT(A) had confirmed the substantive addition in Shri Mukkar's case. The Tribunal found that the uncertainty justifying the protective assessment no longer survived, as the Revenue had proceeded substantively against Shri Mukkar and the addition was confirmed. The mere pendency of further appellate proceedings for the substantive addition does not, by itself, justify sustaining the protective addition in the assessee's hands. Such a situation would render the protective assessment a parallel substantive assessment. The Tribunal found no infirmity in the CIT(A)'s order deleting the protective addition, as the Revenue had not provided material to demonstrate independent assessability in the assessee's hands or that the amount was liable to tax in the assessee's hands notwithstanding the substantive addition in Shri Mukkar's case. The grounds raised by the Revenue were dismissed.

What were the facts?

The Revenue appealed the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2017-18, which deleted a protective addition of Rs. 5,00,00,000/- made by the Assessing Officer (AO) in the hands of Land Energy & Resources Limited (the assessee). The AO had made this addition protectively, while a substantive addition of the same amount was made in the hands of Shri Mohnish Mohan Mukkar. The CIT(A), in his own order dated 19.08.2025, had confirmed the substantive addition in the case of Shri Mohnish Mohan Mukkar. The Revenue's appeal before the ITAT was heard ex parte as the assessee did not attend.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) erred in deleting the protective addition of Rs. 5,00,00,000/- made by the AO, without appreciating the purpose of protective assessment to safeguard Revenue's interests against potential escapement of income. 2. Whether, on the facts and in law, the CIT(A) erred in holding that the protective addition in the assessee's hands is unsustainable because the corresponding substantive addition in the hands of Shri Mohnish Mohan Mukkar was confirmed by him. 3. Whether, on the facts and in law, the CIT(A) erred in deleting the protective addition by failing to appreciate that the substantive addition in the case of Shri Mohnish Mohan Mukkar has not yet attained legal finality, being subject to further appellate proceedings. Assessee's contentions: Not recorded as the appeal was heard ex parte. Revenue's contentions: The CIT(A) erred in deleting the protective addition. The purpose of protective assessment is to safeguard Revenue's interests. The protective addition should not be deleted merely because the substantive addition has not attained finality, as it is subject to further appellate proceedings.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Manoj Kumar (CIT-DR)

Hearing: 29/09/2026

PER OM PRAKASH KANT, AM

This appeal by the Revenue is directed against the order dated 27.03.2026 passed by the learned Commissioner of Income-tax (Appeals) for the assessment year 2017-18, whereby the protective addition of Rs.5,00,00,000/- made by the Assessing Officer in the hands of the assessee has been deleted. The grounds raised by the Revenue are reproduced as under:

ITA 3714/MUM/2026 2 LAND ENERGY & RESOURCES LTD

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the protective addition of Rs. 5,00,00,000/- made by the Assessing Officer, without appreciating that the purpose of protective assessment is to safeguard the legitimate interests of the Revenue against the potential escapement of income. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the protective addition in the hands of the assessee company is unsustainable since the corresponding substantive addition in the hands of Shri Mohnish Mohan Mukkar is confirmed by him vide his own order dated 19.08.2025. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the protective addition of Rs. 5,00,00,000/- made by the Assessing Officer by failing to appreciate that the substantive addition in the case of Shri Mohnish Mohan Mukkar has not yet attained legal finality, as it is subject to further appellate proceedings before higher authorities.” 2. Despite notifying, none attended on behalf of the assessee. The appeal was, therefore, heard ex parte qua the assessee, after hearing the learned Departmental Representative and on the basis of the material available on record.

In appeal before the learned CIT(A), fourteen notices were issued between 14.03.2019 and 13.05.2025, on each of which the record notes that none attended, no adjournment was sought, and, save for one occasion (26.03.2021, when a written submission was filed), no submission was made. The learned CIT(A) recorded that, despite these being non-faceless proceedings, no one appeared throughout, and, applying Shri B.N. Bhattacharjee v. ITO [1979] 118 ITR 461 (SC) — that an appeal is not pursued merely by filing a memo of appeal, but requires effective prosecution — held that he was constrained to presume the appellant uninterested in pursuing

ITA 3714/MUM/2026 3 LAND ENERGY & RESOURCES LTD

the appeal. He nonetheless proceeded to decide the appeal on merits, since written submissions had been placed on the portal. 4. On merits, the learned CIT(A) noted that, by his own order dated 19.08.2025 in the case of Shri Mohnish Mohan Mukkar (Appeal No. CIT(A), Delhi-29/10458/2018-19, A.Y. 2017-18), he had confirmed, on substantive basis, all additions made by the AO in that case, including the very sum of Rs. 5,00,00,000/- here in question. Holding that a protective addition of the same sum could not simultaneously survive in the hands of the present assessee once the substantive addition stood confirmed, he deleted the addition and allowed the appeal.

We have carefully considered the impugned order and the submissions of the learned Departmental Representative. The short issue arising for consideration is whether, in the facts of the present case, the protective addition of Rs.5,00,00,000/- made in the hands of the assessee can be sustained when the corresponding substantive addition has already been confirmed in the hands of Shri Mohnish Mohan Mukkar.

The material on record shows that the Assessing Officer made the addition of Rs.5,00,00,000/- in the hands of the assessee only on a protective basis, while the corresponding addition was made substantively in the hands of Shri Mohnish Mohan Mukkar. The learned CIT(A), in the case of Shri Mohnish Mohan Mukkar,

ITA 3714/MUM/2026 4 LAND ENERGY & RESOURCES LTD

subsequently confirmed the substantive addition vide order dated 19.08.2025. The Revenue itself does not dispute this factual position. In fact, the third ground raised before us proceeds on the basis that the substantive addition in the hands of Shri Mohnish Mohan Mukkar has not attained finality since further appellate proceedings are pending. A protective assessment is, by its very nature, a measure adopted by the Revenue to safeguard the same income from escaping assessment where there is uncertainty as to the person in whose hands such income is assessable. It cannot, however, result in the same income being ultimately subjected to tax in the hands of two different assessees.

In the present case, the uncertainty which could have justified the protective assessment no longer survives at the stage under consideration. The Revenue has proceeded substantively against Shri Mohnish Mohan Mukkar, and the corresponding substantive addition of Rs.5,00,00,000/- has been confirmed by the learned CIT(A). Thus, the Revenue's own case is that the amount is substantively assessable in the hands of Shri Mohnish Mohan Mukkar. The mere fact that the substantive assessment is subject to further appellate proceedings does not, by itself, furnish a ground for sustaining the protective addition in the hands of the assessee. Otherwise, the protective assessment would cease to be protective in character and would operate as a parallel substantive assessment of the same income in the hands of another person.

ITA 3714/MUM/2026 5 LAND ENERGY & RESOURCES LTD

We are, therefore, unable to accept the contention of the Revenue that the protective addition should be retained merely because the substantive addition has not attained finality. If, in further appellate proceedings, the substantive addition in the case of Shri Mohnish Mohan Mukkar is ultimately disturbed, the consequences thereof would have to be considered in accordance with law at the appropriate stage. Such possibility, by itself, cannot justify sustaining the present protective addition.

In the facts before us, the learned CIT(A) has deleted the protective addition only after taking note of the corresponding substantive addition having been confirmed in the hands of Shri Mohnish Mohan Mukkar. The Revenue has not brought before us any material to demonstrate that the impugned amount is independently assessable in the hands of the assessee or that, notwithstanding the substantive addition in the case of Shri Mohnish Mohan Mukkar, the same amount is liable to be brought to tax in the hands of the assessee. We, therefore, find no infirmity in the order of the learned CIT(A) deleting the protective addition of Rs.5,00,00,000/-. Accordingly, the grounds raised by the Revenue are dismissed.

ITA 3714/MUM/2026 6 LAND ENERGY & RESOURCES LTD

10.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open Court on 29/09/2026.

Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 29/09/2026 Kunal Kr. P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

Recent GST High Court judgments

Search GST case law →