THOMAS CHANDY,KOTTAYAM vs. NATIONAL E-ASSESSMENT CENTRE, KOCHI

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ITA 880/COCH/2023Status: DisposedITAT Cochin23 October 2024AY 2018-19Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Amarjit Singh (Judicial Member)2 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a 'protective' addition is not maintainable in the hands of the same assessee in different assessment years, citing the 'A and B' principle from the Lalji Haridas vs. ITO case. Therefore, the impugned long-term capital gains assessed in the assessee's hands should be deleted.

What were the facts?

The assessee's appeal concerns the assessment year 2018-19. Both lower authorities added a "protective" long-term capital gain of Rs. 3,70,48,888/- in the assessee's hands, similar to a substantive assessment made for the assessment year 2012-13.

What were the issues?

The primary issue was the maintainability of a 'protective' addition of long-term capital gains in the hands of the same assessee across different assessment years.

Which sections of the Income-tax Act were involved?

Section 250

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri R. Krishnan, CA
For Respondent: Dr. S. Pandian, CIT-DR
Hearing: 19.08.2024Pronounced: 23.10.2024

O R D E R Per Bench This assessee’s appeal for A.Y. 2018-19 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/ NFAC/S/250/2023- 24/1059988854(1) dated 22.01.2024 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

Heard both parties at length. Case file perused.

2.

It emerges at the outset that both the learned lower authorities have added “protective” long term capital gain amounting to Rs. 3,70,48,888/- in assessee’s hands followed by the very income assessed on substantive for the assessment year 2012-13. Meaning thereby that it is assessee only in whose hands both these substantive and protective assessments have been framed regarding the very impugned long term capital gain addition. That being the clinching case, we quote Thomas Chandy hon'ble apex court’s landmark decision in [1961] 43 ITR 387 (SC) Lalji Haridas vs. ITO, setting the law of such a protective assessment framed on ex abundanti cautela i.e., “out of an abundant caution:” reading as follows: "In cases where it appears to the income tax authorities that certain income has been received during the relevant previous year but it is not clear who has received the income and prima facie it appears that the income may have been received either by A or B or by both together, it would be open to the relevant income tax authorities to determine the said question by taking appropriate proceedings both against A and B."

3. We conclude in these facts that once such a concept of "protective" addition is not maintainable in the same assessee's hands in different assessment years going by "A and B" principle, the impugned long term capital gains assessed in his hands deserve to be deleted. Ordered accordingly.

3.

This assessee’s appeal is allowed in above terms.

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