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Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
does not survive. By relying on the order of the Tribunal of Jodhpur Bench in the case of Ramesh Chand Prem Raj Soni (HUF) Vs. Assistant Commissioner of Income Tax, 2006 (10) TMI 197-ITAT, Jodhpur dated 06/10/2016 and sought for allowing the Appeal.
Per contra, the Ld. Departmental Representative relied on the orders of the Lower Authorities.
It is not in dispute that the assessment order has been passed against the assessee on 28/12/2016 by making addition in the hands of the Assessee Firm on protective basis to protect the interest of the Revenue and in the very same assessment order, it is observed that ‘since both the partners of the Firm have admitted and owned the introduction of Rs. 67,50,000/- from their own source to the Assessee Firm and in the absence of no plausible explanation furnished by the partners the reassessment proceedings in their hands are being initiated separately for bringing the said amount to tax’. It is brought to our notice that the said reassessment proceedings u/s 147 of the Act against the partners of the Assessee Firm was dropped on account of same becoming time barred as per the provision of Section 153(2) of the Act on 31/03/2023, which was not disputed by the Ld. DR. It is well settled proposition of law that when substantive addition does not survive on account of being time barred, then the protective addition also does not survive. The said view of ours have been fortified by the order of the Tribunal in (Jodhpur Bench) the case of Ramesh Chand Prem Raj Soni (HUF) Vs. ACIT 2006 (10) TMI-197 dated 16/10/2016, where in it is held as under:-
"6. We meticulously traversed through all the evidences and also took the learned Authorized Representative and Departmental Representative, through all the relevant papers placed in the file to which our attention was drawn. There is no dispute with regard to the facts that all the additions, which are the subject-matter of this appeal or for that matter that of assessment order passed under s. 158BD in the case of the HUF, are made on protective basis. All parallel additions were made in the case of Shri Ramesh Chand Soni individual. The assessment made under s. 158BC in the case of Shri Ramesh Chand Soni does not survive at all, since it has been struck down being time-barred. The addition made on substantive basis have not been decided by deleting the same from assessee's individual hands rather they were thrown along with the block assessment order. meaning thereby, now there is no substantive addition in existence at all; and the protective addition presupposes the existence of substantive additions Let us put it in another words that whenever additions are made, they are only substantive additions. The term protective addition is a misnomer, actually it is a substitutive addition. The 'protective-addition' name has been given to it since it protects the interest of the Revenue Say, if in X's case, addition cannot be ultimately made, it may be considered in the case of Y. Here in such a case there happens to be some doubt as to whom a particular income belongs to when it is not clearly established as to in whose hands a particular income should be added, when there are evidences that it may belong to either of the two, or when scintillating evidences are available from which it is not possible to come to clear-cut conclusion, readily. In the given case the substantive additions have not been declared to not belong to Shri Ramesh Chand Soni. Had that been the case, this protective addition could have been considered and added substantially if it
Kanav Metals vs. ITO was found to belong to "protective assessee. We don't say that no protective addition can be made under Chapter XIV-B of the Act"