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Issues involved: Protective assessment, Double assessment
The judgment of the court was delivered by OZA C.J. The reference was made by the Income-tax Appellate Tribunal regarding the confirmation of the protective assessment in the case of Messrs. Vinit Talkies, Jabalpur, where a claim was made that income from matinee shows belonged to Smt. Dayabai. The Income Tax Officer (ITO) included the income in the total income of the firm but also made a protective assessment in the hands of Smt. Dayabai. The Tribunal upheld the findings of the ITO, leading to double assessment of the same income. The Tribunal confirmed the protective assessment made by the ITO in the hands of Smt. Dayabai, which was upheld by the Appellate Authority Commissioner (AAC). The Tribunal dismissed the appeal filed by Smt. Dayabai, stating that she was merely a name-lender and the income rightfully belonged to the firm, Messrs. Vinit Talkies. However, after subsequent proceedings, it was found that the same income was assessed in the hands of both the firm and Smt. Dayabai, resulting in impermissible double assessment. The Court referred to a similar case decided by the Supreme Court and the Allahabad High Court, emphasizing that double assessment is not permissible in law. The protective assessment against Smt. Dayabai was deemed unnecessary as the income had already been assessed in the hands of the firm. Therefore, the Tribunal was not justified in confirming the protective assessment, and the parties were directed to bear their own costs.
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