1992 (1) TMI 177 - AT - Income Tax

Summary

Issues:
1. Assessment made on a protective basis.
2. Deletion of additions by the Dy. Commissioner(A).
3. Remission of the matter to the ITO.
4. Validity of protective assessments.

Detailed Analysis:
Issue 1: Assessment made on a protective basis
In both appeals, the original assessments were made on a protective basis for the assessment year 1986-87. The assessments were set aside by the Dy. Commissioner(A) in both cases. The son's assessment was based on income sources from tuitions and gifts received, while the mother's assessment was based on income from knitting and embroidery. The ITO estimated the income in both cases and made the assessments on a protective basis pending further decisions regarding specific investments made by the assessees.

Issue 2: Deletion of additions by the Dy. Commissioner(A)
The Dy. Commissioner(A) deleted the additions made by the ITO in both cases. In the son's case, the addition of Rs. 9,034 was deleted, and in the mother's case, the addition of Rs. 7,460 was deleted. The Dy. Commissioner(A) found no justification for these additions and ruled in favor of the assessees.

Issue 3: Remission of the matter to the ITO
In both cases, the Dy. Commissioner(A) remitted the matter to the ITO with directions to follow his view taken for the assessment year 1988-89. This remission was based on the protective nature of the assessments and pending decisions on specific investments made by the assessees. However, the Appellate Tribunal found that such remission had no legal authority and cancelled the orders remitting the matter to the ITO.

Issue 4: Validity of protective assessments
The Appellate Tribunal held that the protective assessments made by the ITO were not justified in law. The Tribunal emphasized that the circumstances for making protective assessments, as outlined by the Supreme Court, did not apply in these cases. The Tribunal found that the assessees had provided sufficient evidence of their income sources, and the additions made by the ITO were unjustified. The Tribunal allowed the appeals filed by the assessees, ruling in their favor and against the protective assessments made by the ITO.

In conclusion, the Appellate Tribunal ruled in favor of the assessees, allowing their appeals and cancelling the protective assessments made by the ITO. The Tribunal found that the additions made by the ITO were not justified, and the remission of the matter to the ITO by the Dy. Commissioner(A) had no legal authority.